BLOCK C2020 CONFLICTS OF LAW Condition No. 14 is subversive of public policy on transfers of venue of actions.

COMPREHENSIVE DIGESTS – FINALS For, although venue may be changed or transferred from one province to another
by agreement of the parties in writing pursuant to Rule 4, Section 3, of the Rules
001 SWEET LINES INC. v. TEVES (APASAN) of Court, such an agreement will not be held valid where it practically negates the
May, 19, 1978 | Santos, J. | Choice of Forum action of the claimants, such as the private respondents herein.

DOCTRINE: Although venue may be changed or transferred from one province

PETITIONER: Sweet Lines Inc. to another by agreement of the parties in writing pursuant to Rule 4, Section 3, of
RESPONDENTS: Hon. Bernardo Teves, Presiding Judge, CFI of Misamis the Rules of Court, such an agreement will not be held valid where it practically
Oriental Branch VII, Leovigildo Tandog, Jr., and Rogelio Tiro negates the action of the claimants.
SUMMARY: Atty. Leovigildo Tandog (Atty. Tandog) and Rogelio Tiro (Tiro)
bought tickets at the branch office of Sweet Lines Inc. (Sweet Lines) at Cagayan
de Oro City. The vessel M/S Sweet Hope was bound for Tagbiliran City (in FACTS:
Bohol) via the port of Cebu. Atty. Tandog and Tiro were advise to proceed to 1. Private respondents Atty. Leovigildo Tandog (Atty. Tandog) and Rogelio
transfer to another vessel M/S Sweet Town since many passengers were bound Tiro (Tiro), a contractor by professions, bought tickets Nos. 0011736 and
for Surigao. However, this vessel was already filled to capacity and they were 011737 for Voyage 90 on December 31, 1971 at the branch office of Sweet
forced to agree to hide at the cargo section to avoid inspection of the officers of
Lines Inc. (Sweet Lines), a shipping company transporting inter-island
the Philippine Coastguard. This prompted Atty. Tandog and Tiro to file an action
before the CFI of Misamis Oriental for breach of contract of carriage and passengers and cargoes, at Cagayan de Oro City.
damages against Sweet Lines. Sweet Lines moved to dismiss on the ground of 2. Atty. Tandog and Tiro were to board Sweet Line's vessel, M/S "Sweet Hope"
improper venue on the basis of Condition No. 14 printed at the back of the bound for Tagbilaran City (in Bohol) via the port of Cebu. Upon learning that
passenger tickets which states that all actions against Sweet Lines should be the vessel was not proceeding to Bohol, since many passengers were bound
brought before the Court of Cebu. The motion was denied by the court through for Surigao, Atty. Tandog and Tiro, per advice, went to the branch office for
Judge Teves. The MR was denied. Hence this petition. proper relocation to M/S "Sweet Town". Because the latter vessel was already
filled to capacity, they were forced to agree "to hide at the cargo section to
ISSUE: WoN Condition No. 14 is valid and enforceable – NO
avoid inspection of the officers of the Philippine Coastguard."
At the outset, the Court held that there was a valid contract of carriage. However, 3. Atty. Tandog and Tiro sued Sweet Lines for damages and for breach of
the condition No. 14 must be scrutinized since it was a form of adhesion contract. contract of carriage in the alleged sum of P10,000.00 before the CFI of
And in the light of the circumstances prevailing in the inter-island shipping Misamis Oriental.
industry in the country today, the court held that the condition was void and a. They alleged that they were, during the trip," "exposed to the
unenforceable for two reasons:
scorching heat of the sun and the dust coming from the ship's cargo
First, the condition is unfair since it is hardly just and proper to expect the of corn grits," and that the tickets they bought at Cagayan de Oro
passengers to examine their tickets received from crowded/congested counters, City for Tagbilaran were not honored and they were constrained to
more often than not during rush hours, for conditions that may be printed thereon, pay for other tickets.
much less charge them with having consented to the conditions, so printed,
especially if there are a number of such conditions in fine print, as in this case. 4. Sweet Lines moved to dismiss the complaint on the ground of improper
venue. This motion was premised on the condition printed at the back of the
Second [IMPT], Condition No. 14 subverts the public policy on transfer of venue tickets, i.e., Condition No. 14, which reads:
of proceedings of this nature, since the same will prejudice rights and interests of
innumerable passengers in different parts of the country who, under Condition 14. It is hereby agreed and understood that any and all actions arising out of the
No. 14, will have to file suits against Sweet Lines ONLY in the City of Cebu. conditions and provisions of this ticket, irrespective of where it is issued, shall be
 filed in the competent courts in the City of Cebu. is not valid, that the same is not an essential element of the contract
of carriage, being in itself a different agreement which requires the
5. The motion was denied by the trial court. Sweet Lines moved to reconsider mutual consent of the parties to it;
the order of denial, but no avail. b. that they had no say in its preparation, the existence of which they
6. Hence, this instant petition for prohibition for preliminary injunction, could not refuse, hence, they had no choice but to pay for the tickets
'alleging that the respondent judge Teves (Judge Teves) has departed from and to avail of Sweet Line's shipping facilities out of necessity;
the accepted and usual course of judicial proceeding" and "had acted without c. that the carrier "has been exacting too much from the public by
or in excess or in error of his jurisdiction or in gross abuse of discretion. inserting impositions in the passage tickets too burdensome to bear,"
that the condition which was printed in fine letters is an imposition
ISSUE: on the riding public and does not bind them, citing cases;
1. WoN Condition No. 14 printed at the back of the passage tickets purchased d. that while venue of actions may be transferred from one province to
tickets, which limits the venue of actions arising from the contract of carriage another, such arrangement requires the "written agreement of the
to theCourt of First Instance of Cebu, valid and enforceable - No, for parties", not to be imposed unilaterally; and
although venue may be changed or transferred from one province to another e. that assuming that the condition is valid, it is not exclusive and does
by agreement of the parties in writing pursuant to Rule 4, Section 3, of the not, therefore, exclude the filing of the action in Misamis Oriental
Rules of Court, such an agreement will not be held valid where it practically
negates the action of the claimants, such as the private respondents herein.
THERE WAS A VALID CONTRACT OF CARRIAGE
RULING: WHEREFORE, the petition for prohibition is DISMISSED.
3. There is no question that there was a valid contract of carriage entered
RATIO: into by Sweet Lines and Atty. Tandog and Tiro and that the passage
1. CONTENTIONS OF SWEET LINES: tickets, upon which the latter based their complaint, are the best
a. Sweet Lines contends that Condition No. 14 is valid and evidence thereof. All the essential elements of a valid contract, i.e., consent,
enforceable, since Atty. Tandog and Tiro acceded to it when they cause or consideration and object, are present. As held in Peralta de
purchased passage tickets at its Cagayan de Oro branch office and Guerrero, et al. v. Madrigal Shipping Co., Inc.,
took its vessel M/S "Sweet Town" for passage to Tagbilaran, Bohol
— that the condition of the venue of actions in the City of Cebu is It is a matter of common knowledge that whenever a passenger boards a ship for
proper since venue may be validly waived; transportation from one place to another he is issued a ticket by the shipper
b. that is an effective waiver of venue, valid and binding as such, since which has all the elements of a written contract, Namely: (1) the consent of the
it is printed in bold and capital letters and not in fine print and merely contracting parties manifested by the fact that the passenger boards the ship and the
assigns the place where the action sing from the contract is shipper consents or accepts him in the ship for transportation; (2) cause or
institution; and consideration which is the fare paid by the passenger as stated in the ticket; (3) object,
c. that condition No. 14 is unequivocal and mandatory, the words and which is the transportation of the passenger from the place of departure to the place
phrases "any and all", "irrespective of where it is issued," and "shag" of destination which are stated in the ticket.
leave no doubt that the intention of Condition No. 14 is to fix the
venue in the City of Cebu, to the exclusion of other places; CONDITION NO. 14 IS A CONTRACT OF ADHESION
d. that the orders of Judge Teves are an unwarranted departure from
established jurisprudence governing the case; and that he acted 4. It should be borne in mind, however, that with respect to the fourteen (14)
without or in excess of his jurisdiction in is the orders complained
conditions — one of which is "Condition No. 14" which is in issue in this
of.
2. CONTENTIONS OF PRIVATE RESPONDENTS: case — printed at the back of the passage tickets, these are commonly known
a. On the other hand, private respondents claim that Condition No. 14 as "contracts of adhesion," the validity and/or enforceability of which will
 have to be determined by the peculiar circumstances obtaining in each a. first, under circumstances obligation in the inter-island shipping
case and the nature of the conditions or terms sought to be enforced. industry, it is not just and fair (reason explained in ratio 8 and 9)
5. By the peculiar circumstances under which contracts of adhesion are entered to bind passengers to the terms of the conditions printed at the
into — namely, that it is drafted only by one party, usually the corporation, back of the passage tickets, on which Condition No. 14 is printed
and is sought to be accepted or adhered to by the other party, in this instance in fine letters, and
the passengers, private respondents, who cannot change the same and who b. [IMPT] second, Condition No. 14 subverts the public policy on
are thus made to adhere thereto on the "take it or leave it" basis — certain transfer of venue of proceedings of this nature, since the same
guidelines in the determination of their validity and/or enforceability have will prejudice rights and interests of innumerable passengers in
been formulated in order to that justice and fan play characterize the different parts of the country who, under Condition No. 14, will
relationship of the contracting parties. Thus, this Court speaking through have to file suits against Sweet Lines ONLY in the City of Cebu.
Justice J.B.L. Reyes in Qua Chee Gan v. Law Union and Rock Insurance
Co., and later through Justice Fernando in Fieldman Insurance v. Vargas, 8. It is a matter of public knowledge, of which We can take judicial notice, that
held — there is a dearth of and acute shortage in inter-island vessels plying between
the country's several islands, and the facilities they offer leave much to be
The courts cannot ignore that nowadays, monopolies, cartels and concentration of desired. Thus, even under ordinary circumstances, the piers are congested
capital endowed with overwhelm economic power, manage to impose upon parties d with passengers and their cargo waiting to be transported. The conditions are
with them y prepared 'agreements' that the weaker party may not change one whit his even worse at peak and/or the rainy seasons, when passengers literally
participation in the 'agreement' being reduced to the alternative 'to take it or leave it,'
scramble to secure whatever accommodations may be availed of, even
labelled since Raymond Saleilles 'contracts by adherence' (contracts d' adhesion) in
through circuitous routes, and/or at the risk of their safety - their immediate
contrast to those entered into by parties bargaining on an equal footing. Such contracts
(of which policies of insurance and international bill of lading are prime examples) concern, for the moment, being to be able to board vessels with the hope of
obviously cap for greater strictness and vigilance on the part of the courts of justice reaching their destinations. The schedules are - as often as not if not more so
with a view to protecting the weaker party from abuses and imposition, and prevent - delayed or altered. This was precisely the experience of Atty. Tandog and
their becoming traps for the unwary. Tiro when they were relocated to M/S "Sweet Town" from M/S "Sweet
Hope" and then allegedly "exposed to the scorching heat of the sun and the
6. To the same effect and import, and, in recognition of the character of dust coming from the ship's cargo of corn grits," because even the latter vessel
contracts of this kind, the protection of the disadvantaged is expressly was filled to capacity.
enjoined by the New Civil Code — 9. Under these circumstances, it is hardly just and proper to expect the
passengers to examine their tickets received from crowded/congested
In all contractual property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance indigence, mental
counters, more often than not during rush hours, for conditions that may
weakness, tender age and other handicap, the courts must be vigilant for his be printed thereon, much less charge them with having consented to the
protection. conditions, so printed, especially if there are a number of such conditions
in fine print, as in this case.
CONDITION NO. 14 IS AGAINST PUBLIC POLICY [IMPT] 10. Again, it should be noted that Condition No. 14 was prepared solely at the
instance of the Sweet Lines; Atty. Tandog and Tiro had no say in its
7. Considered in the light of the foregoing norms and in the context of
preparation. Neither did they have the opportunity to take the same into
circumstances prevailing in the inter-island shipping industry in the country
account prior to the purchase of their tickets. For, unlike the small print
today, We find and hold that Condition No. 14 printed at the back of the
provisions of insurance contracts - the common example of contracts of
passage tickets should be held as void and unenforceable for the following
adherence - which are entered into by the insured in full awareness of said
reasons:
conditions, since the insured is afforded the opportunity to examine and
 consider the same, passengers of inter-island vessels do not have the same against it. The said condition should, therefore, be declared void and
chance, since their alleged adhesion is presumed only from the fact that unenforceable, as contrary to public policy - to make the courts accessible to
they purchased the passage tickets. all who may have need of their services.
11. It should also be stressed that shipping companies are franchise holders of
certificates of public convenience and, therefore, possess a virtual monopoly
over the business of transporting passengers between the ports covered by
their franchise. This being so, shipping companies, like Sweet Lines, engaged
in inter-island shipping, have a virtual monopoly of the business of
transporting passengers and may thus dictate their terms of passage, leaving
passengers with no choice but to buy their tickets and avail of their vessels
and facilities. Finally, judicial notice may be taken of the fact that the bulk of
those who board these inter-island vessels come from the low-income groups
and are less literate, and who have little or no choice but to avail of petitioner's
vessels.
12. Condition No. 14 is subversive of public policy on transfers of venue of
actions. For, although venue may be changed or transferred from one
province to another by agreement of the parties in writing pursuant to
Rule 4, Section 3, of the Rules of Court, such an agreement will not be
held valid where it practically negates the action of the claimants, such
as the private respondents herein. The philosophy underlying the
provisions on transfer of venue of actions is the convenience of the plaintiffs
as well as his witnesses and to promote the ends of justice. Considering the
expense and trouble a passenger residing outside of Cebu City would
incur to prosecute a claim in the City of Cebu, he would most probably
decide not to file the action at all. The condition will thus defeat, instead of
enhance, the ends of justice. Upon the other hand, Sweet Lines has branches
or offices in the respective ports of call of its vessels and can afford to litigate
in any of these places. Hence, the filing of the suit in the CFI of Misamis
Oriental, as was done in the instant case, will not cause inconvenience to,
much less prejudice, Sweet Lines.
13. Public policy is "... that principle of the law which holds that no subject or
citizen can lawfully do that which has a tendency to be injurious to the public
or against the public good...". Under this principle "...freedom of contract or
private dealing is restricted by law for the good of the public." Clearly,
Condition No. 14, if enforced, will be subversive of the public good or
interest, since it will frustrate in meritorious cases, actions of passenger
claimants outside of Cebu City, thus placing Sweet Lines at a decided
advantage over said persons, who may have perfectly legitimate claims
 002 CADALIN v. POEA ADMINISTRATOR (Arcenas) process, joinder of actions, period and requisites for appeal, and so forth, are
December 5, 1994 | Quiason, J. | Choice of Forum governed by the laws of the forum. This is true even if the action is based upon a
foreign substantive law. However, such characterization becomes irrelevant if the
G.R. No. L-104776 December 5, 1994 law of the forum provides for a borrowing statute, which is Section 48 in this case.
PETITIONERS: Bienvenido M. Cadalin, Rolando M. Amul, Donato B. Evangelista, And The Rest Of But Section 48 was not applied because it would contravene the public policy on the
1,767 Named-Complainants, Thru And By Their Attorney-In-Fact, Atty. Gerardo A. Del Mundo
RESPONDENTS: POEA, NLRC , Brown & Root International, Inc. (BRII) And/Or Asia International protection of labor. Hence, PH law applies and under our labor laws, Article 291 of
Builders Corporation (AIBC) the LC provides the prescriptive period for filing "money claims arising from
G.R. Nos. 104911-14 December 5, 1994 employer-employee relations." The claims in the cases at bench all arose from the
PETITIONER: Bienvenido M. Cadalin, Et Al. employer-employee relations, which is broader in scope than claims arising from a
RESPONDENTS: NLRC, BRII and AIBC
G.R. Nos. 105029-32 December 5, 1994 specific law or from the collective bargaining agreement. That the 3-year prescriptive
PETITIONERS: Asia International Builder Corporation And Brown & Root International, Inc., period applies only to money claims does not find support the plain language of the
RESPONDENTS: NLRC, Bienvenido M. Cadalin (et al – super dami nila 1k +) provision.

Summary: Claimants in this case consist of approximately 1,767 OFWs recruited Doctrine: Procedural matters, such as service of process, joinder of actions, period
by AIBC for its accredited foreign principal BRII from 1975 to 1983. These are and requisites for appeal, and so forth, are governed by the laws of the forum. This
consolidated cases of Cadalin et al against AIBC and BRII for money claims arising is true even if the action is based upon a foreign substantive law.
from their recruitment and employment praying for the payment of the unexpired d/n: Procedure heavy case bc it took a decade to decide it. NLRC: We have taken painstaking efforts to
portion of their contracts (which was prematurely terminated) among others (see sift over the more than fifty volumes now comprising the records of these cases. So, laban lang.
footnote 2). Upon filing the complaint and subsequently submitting the case for FACTS:
decision, AIBC asked for an extension for filing their answer which was granted. In 1. Cadalin et al allege that they were recruited by AIBC for its accredited foreign
the meantime, AIBC and BRII appealed to NLRC seeking reversal of POEA principal, BRII1, on various dates from 1975 to 1983.
Admin’s order directing them to file their respective position papers and answer. a. They were all deployed at various projects undertaken by BRII in
Cadalin et al opposed this saying it was delaying tactics and prayed the companies several countries in the Middle East (Saudi Arabia, Libya, United
be declared in default but NLRC enjoined POEA Admin from hearing the labor cases Arab Emirates and Bahrain) as well as in Southeast Asia, in
and suspended the period for filing of answers. Later, NLRC dismissed the other Indonesia and Malaysia.
appeals of AIBC and BRII. (The initial few hundred Claimants bloated to 1,000+ b. Having been officially processed as overseas contract workers by
OFW-Claimants since the filing of the original complaint). Two years after the filing the Government, all the individual complainants signed standard
of the original complaint, AIBC and BRII finally submitted its answer to the overseas employment contracts with AIBC before their departure
complaint. Two years after that (1989), POEA Admin rendered a decision in favor from the Philippines.
of the Cadalin et al, but only to 324 claimants. AIBC and BRII appealed to NLRC. 2. In Bahrain, where some of the complainants were deployed, His Majesty Isa
A year later, Cadalin et al filed their manifestational motion praying all 1,767 Bin Salman Al Kaifa, Amir of Bahrain, issued Amiri Decree No. 23 on June
claimants be awarded their monetary claims for failure of the companies to file their 16, 1976 (See end of digest for relevant provisions regarding OFWs)
answers within the reglementary period. NLRC modified the decision of POEA, 3. These are consolidated cases where Bienvenido Cadalin, Rolando Amul and
dismissing other claims due to prescription, and those who did not work in Bahrain Donato Evangelista, in their own behalf and on behalf of 728 other OFWs
and did not award overtime pay and other money claims for lack of evidence. Hence, (Cadalin et al), instituted a class suit against the POEA by filing an Amended
these petitions before the SC. The common issue is W/N NLRC committed GAD in Complaint for money claims2 against AIBC and BRII.
applying the three-year prescriptive period under the LC, instead of the 10-year a. The claimants were represented by Atty. Gerardo del Mundo.
period under CC – LABOR CODE APPLIES. Procedural matters, such as service of

1
BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction; while and salary differential pay; fringe benefits; refund of SSS and premium not remitted to the SSS; refund of
AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy Filipino withholding tax not remitted to the BIR; penalties for committing prohibited practices; as well as the
workers for overseas employment on behalf of its foreign principals. suspension of the license of AIBC and the accreditation of BRII
2
Prayed for the payment of the unexpired portion of the employment contracts (for premature termination)
and interest of the earnings of the Travel and Reserved Fund, interest on all the unpaid benefits; area wage
4. Oct 19 ‘84 – Cadalin et al filed their Compliance to the Order and an Urgent petitions, insofar as it concerns those who signed the quitclaims. (summary
Manifestation praying to direct parties to file their position papers and to below)
subsequently submit the case for decision. AIBC asked for an extension Cadalin et al’s Allegations AIBC & BRII’s Comment
5. Nov 6 ’84 filed another extension, which was GRANTED. ON SPEEDY DISPOSITION
6. Feb 27 ‘85– AIBC and BRII appealed to NLRC seeking reversal of order of (G.R. No. 104776) deprived by NLRC Cannot be faulted for delay, considering
POEA Admin. Cadalin et al opposed the appeal saying it was dilatory and and the POEA of their right to a speedy the volume of 1,500 claimants, it was
prayed the companies be declared in default. disposition of their cases because POEA impossible to prepare the answers within
7. September 19 ’85 – NLRC enjoined POEA Admin from hearing the labor Administrator allowed AIBC and BRII the ten-day period provided in the
cases and suspended the period for filing of answers of AIBC and BRII. to file their answers in two years (on NLRC Rules, and that when the motion
8. Dec 12 ‘86 – NLRC dismissed the two appeals filed by AIBC and BRII. June 19, 1987) after the filing of the to declare AIBC in default was filed on
9. June 19 ‘87 – AIBC submitted its answer to the complaint original complaint (on April 2, 1985) July 19, 1987, said party had already
10. June 24 – Cadalin et al filed their Urgent Motion to Strike Out Answer and NLRC, in total disregard of its own filed its answer, and that considering the
alleging that the Answer was filed out of time. rules, affirmed the action of the POEA staggering amount of the claims (more
11. Oct 26 ‘88 – Cadalin et al submitted their ex parte manifestation motion Admin than US$50,000,000.00) and the
and counter-supplemental motion, together with 446 employment complicated issues raised by the parties,
contracts and service records. the ten-day rule to answer was not fair
12. Oct 27 – Companies filed a consolidated reply and reasonable
13. January 30 ’89 – POEA Admin rendered a decision awarding USD 826, TIMELY ANSWER AND DEFAULT
652.44 in favor of only 324 claimants. (G.R. No. 104776) AIBC and BRII They failed to refute NLRC's finding
14. Feb 10 ’89– The other claimants submitted an Appeal memorandum for should be declared in default and should that there was no common or general
partial appeal – AIBC also filed a MR and Notice of Appeal have rendered summary judgment on interest in the subject matter of the
15. Feb 17 ’89– Other claimants filed their Answer to appeal praying for the basis of the pleadings and evidence controversy — which was the
dismissal of appeal of the companies. submitted by them applicability of the Amiri Decree No. 23
16. March 15 ’89– Cadalin et al filed their Supplement to complainants’ appeal and the nature of the claims varied,
memorandum plus thei newly discovered evidence (payroll records). (salaries of the unexpired portion while
17. April 5 – the companies submitted to NLRC their Manifestation stating that others were pure money claims)
there were only 728 named claimants; later filed their counter-manifestation PRESCRIPTION PERIOD
alleging there were 1,767 of them. (G.R. No. 104776) that the prescriptive that the prescriptive period for filing the
18. Apr 21 ’90 – They filed their manifestational motion praying all 1,767 period for the filing of the claims is ten claims is Article 291 of LC (three years)
claimants be awarded their monetary claims for failure of the companies years (CC), not three years (LC); (G.R. and not Article 1144 of the CC (ten
to file their answers within the reglementary period. Nos. 104911-14) hence NLRC years)
19. Sept 21 ‘91– NLRC promulgated its resolution modifying the POEA committed GAD in applying 3 years.
decision: They assert that their claims are
a. 94 complainants dismissed due to prescription based on the violation of their
b. AIBC and BRII ordered to pay in pesos jointly and severally 149 employment contracts, as amended
complainants, but not including overtime work and those indicated by the Amiri Decree No. 23 of 1976
for lack of evidence and therefore the claims may be
c. Not to pay 19 complainants who appear to have worked elsewhere brought within ten years as provided
than in Bahrain. by Article 1144 of the CC
20. Nov 27 ‘91– Amado 12 others filed a petition for certiorari with SC but was COMPUTATION OF OVERTIME PAY
dismissed and NLRC denied all 3 appeals. (G.R. Nos. 104911-14) denied the their BRII and AIBC claimed that they were
21. HENCE, THIS PETITION BEFORE THE SC. Cadalin et al submitted formula based on an average overtime not bound by the same, because such
compromise agreements for SC approval and jointly moved for dismissal of pay of three hours a day which was memorandum was proposed by a
 proposed by BRII itself during the subordinate Bahrain official and there b. ON THE AMIRI DECREE - its the applicability was one of
negotiation for an amicable settlement was no showing that it was approved by characterization, i.e., whether to characterize the foreign law on
in Bahrain as shown in the the Bahrain Minister of Labor – cannot prescription or statute of limitation as "substantive" or "procedural."
Memorandum of the Ministry of Labor be used as admission by it. c. In Bournias v. Atlantic Maritime where the issue was the applicability of
of Bahrain the Panama Labor Code in a case filed in the State of New York for
claims arising from said Code. In said case, the claims would have
ISSUE/s: W/N NLRC committed GAD in applying the three-year prescriptive prescribed under the Panamanian Law but not under the Statute of
period under the LC, instead of the 10-year period under CC – LABOR CODE Limitations of New York. The U.S. Circuit CA held that the Panamanian
APPLIES. Procedural matters, such as service of process, joinder of actions, period Law was procedural as it was not "specifically intended to be
and requisites for appeal, and so forth, are governed by the laws of the forum. This is substantive," hence, the prescriptive period provided in the law of the
true even if the action is based upon a foreign substantive law. However, such forum should apply (i.e. follow US Law)
characterization becomes irrelevant if the law of the forum provides for a borrowing
statute, which is Section 48 in this case. But Section 48 was not applied because it CHOICE OF FORUM (RELEVANT) – PH LAW APPLIES
would contravene the public policy on the protection of labor. Hence, PH law applies 3. First to be determined is whether it is the Bahrain law on prescription of action
and under our labor laws, Article 291 of the LC provides the prescriptive period for based on the Amiri Decree No. 234 of 1976 or a Philippine law on prescription
filing "money claims arising from employer-employee relations." The claims in the that shall be the governing law.
cases at bench all arose from the employer-employee relations, which is broader in 4. GENERAL RULE: a foreign procedural law will not be applied in the forum.
scope than claims arising from a specific law or from the collective bargaining a. Procedural matters, such as service of process, joinder of actions,
agreement. That the 3-year prescriptive period applies only to money claims does not period and requisites for appeal, and so forth, are governed by the
find support the plain language of the provision. laws of the forum. This is true even if the action is based upon a foreign
substantive law .
RULING: We find no such abuse of discretion. WHEREFORE, all the three b. A law on prescription of actions is sui generis in Conflict of Laws in the
petitions are DISMISSED. sense that it may be viewed either as procedural or substantive,
depending on the characterization given such a law.
RATIO: c. However, the characterization of a statute into a procedural or
1. For POEA Administrator – prescription was ten years (Article 1144 CC)3. Why substantive law becomes irrelevant when the country of the forum
CC? These money claims (under Article 291 of the Labor Code) refer to those has a borrowing statute5 which treats the foreign statute of limitation
arising from the employer's violation of the employee's right as provided by the as one of substance.
Labor Code. Here, what was violated are not the rights of the workers as provided d. While there are several kinds of "borrowing statutes," one form provides
by the Labor Code, but the provisions of the Amiri Decree No. 23 issued in that an action barred by the laws of the place where it accrued, will
Bahrain, which ipso facto amended the worker's contracts of employment. not be enforced in the forum even though the local statute has not
2. For NLRC, prescription should be three years (Article 291 LC) which provides run against it.
that all money claims arising from employer-employee relations shall be filed 5. Section 48 of our Code of Civil Procedure is of this kind, which provides: If
within three years from the time the cause of action accrued; otherwise they shall by the laws of the state or country where the cause of action arose, the action
be forever barred is barred, it is ALSO barred in the Philippines Islands.
a. The 3-year prescriptive period should be applied from the date of a. Section 48 was not repealed or amended by the CC. BUT, under the 1987
repatriation of each individual complainant, since the case was filed in Constitution, Section 48 cannot be enforced ex proprio vigore insofar
the PH. as it ordains the application in this jurisdiction of Section 156 of the

3 5
Art. 1144. The following actions may be brought within ten years from the time the cause of action A "borrowing statute" directs the state of the forum to apply the foreign statute of limitations to the
accrues: (1) Upon a written contract; (2) Upon an obligation created by law; pending claims based on a foreign law
4
Article 156 of the Amiri Decree No. 23 of 1976 provides: A claim arising out of a contract of
employment shall not be actionable after the lapse of one year from the date of the expiry of the contract.
 Amiri Decree No. 23 of 1976 because the 1-year prescriptive period Not a class suit
would contravene the public policy on the protection to labor.6 1. NLRC and the POEA Administrator are correct in their stance that inasmuch as
the first requirement of a class suit is not present (common or general interest
LABOR CODE APPLICABLE LAW ON PRESCRIPTION based on the Amiri Decree of the State of Bahrain), it is only logical that only
6. Having determined that the applicable law on prescription is the Philippine law, those who worked in Bahrain shall be entitled to file their claims in a class suit.
the next question is whether the prescriptive period governing the filing of the a. Each claimant was only interested in their own claims and even
claims is three years, as provided by the Labor Code or ten years, as provided by abandoned their co-claimants and entered into separate compromise
the Civil Code of the Philippines. agreements.
7. Section 7-a of the Eight-Hour Labor Law provides the prescriptive period for b. The concept of “class suit” is that plaintiffs are brought on the record and
filing "actions to enforce any cause of action under said law, and not CBA or any must fairly represent and protect the interest of the others.
other contract. On the other hand, Article 291 of the LC provides the prescriptive c. SC held that those who worked in Bahrain can not be allowed to sue
period for filing "money claims arising from employer-employee relations." in a class suit in a judicial proceeding. The most that can be accorded
a. The claims in the cases at bench all arose from the employer-employee to them under the Rules of Court is to be allowed to join as plaintiffs
relations, which is broader in scope than claims arising from a in one complaint (Revised Rules of Court, Rule 3, § 6).
specific law or from the collective bargaining agreement. 2. The Court is extra-cautious in allowing class suits because they are the exceptions
b. That the 3-year prescriptive period applies only to money claims to the condition sine qua non, requiring the joinder of all indispensable parties.
does not find support the plain language of the provision.

ON SPEEDY DISPOSITION Computing for overtime payment – Memorandum is admissible as evidence

1. It is true that the constitutional right to "a speedy disposition of cases" is not 1. While said memorandum was presented to the POEA without observing the
limited to the accused in criminal proceedings but extends to all parties in all rule on presenting official documents of a foreign government as provided in
cases, including civil and administrative cases, and in all proceedings, including Section 24, Rule 132 of the 1989 Revised Rules on Evidence, it can be
judicial and quasi-judicial hearings. Hence, under the Constitution, any party to a admitted in evidence in proceedings before an administrative body.
case may demand expeditious action on all officials who are tasked with the a. The opposing parties have a copy of the said memorandum, and they
administration of justice could easily verify its authenticity and accuracy.
2. BUT "speedy disposition of cases" is a relative term, a flexible concept. It is b. The admissibility of the offer of compromise made by BRII as
consistent with delays and depends upon the circumstances of each case. What contained in the memorandum is another matter. Under Section 27,
the Constitution prohibits are unreasonable, arbitrary and oppressive delays which Rule 130 of the 1989 Revised Rules on Evidence, an offer to settle
render rights nugatory. a claim is not an admission that anything is due.8
3. Caballero laid down the factors taken into consideration in determining whether
or not the right to a "speedy disposition of cases" has been violated: length of APPLYING AMIRI DECREE (FOREIGN LAW) AS CHOICE OF LAW
delay, reason for the delay, assertion of the right or failure to assert it, and 1. Applying the following legal precepts, SC held that the overseas-
prejudice caused by the delay employment contracts in question adopt the provisions of the Amiri
4. APPLICATION: This case is not a run-of-the-mill variety sucht that the 7-year Decree No. 23 of 1976 as part and parcel.
deliberation and final disposition cannot be said to be attended by unreasonable,
arbitrary or oppressive delays i.e. due to the uniqueness of cicrumstances, there is
no violation of speedy disposition. Before an intelligent answer could be filed in
response to the complaint7.

6
Article 2, Sections 10 and 18; Article 13, Section 3. by various appeals; parties and lawyers alike delayed in terminating the proceedings by squabbling and
7 constant change of counsel etc
the records of employment of the more than 1,700 claimants had to be retrieved from various countries in
8
the Middle East. Some of the records dated as far back as 1975; monetary claims were numerous and of Offer of compromise not admissible. — In civil cases, an offer of compromise is not an admission of any
various legal bases; insufficient definiteness aand clarity of facts in the complaint making it hard to file an liability, and is not admissible in evidence against the offeror.
answer to each complaint filed against the companies; hearings on the merits were consistently interrupted
 a. Article 1377 of the Civil Code9 – Any ambiguity in the overseas-
Art. 107: A contract of employment made for a period of indefinite duration may be terminated by either
employment contracts should be interpreted against AIBC and
party thereto after giving the other party thirty days' prior notice before such termination, in writing, in
BRII, the parties that drafted it – The contracts were prepared by respect of monthly paid workers and fifteen days' notice in respect of other workers. The party terminating
AIBC and BRII themselves, which contained that the laws of the a contract without giving the required notice shall pay to the other party compensation equivalent to the
host country would apply to the contracts if they offer terms and amount of wages payable to the worker for the period of such notice or the unexpired portion thereof.
conditions more favorable than those stipulated: "that total
Art. 111: . . . the employer concerned shall pay to such worker, upon termination of employment,
remuneration and benefits do not fall below that of the host country a leaving indemnity for the period of his employment calculated on the basis of fifteen days' wages for
regulation and custom." of the Philippines provides: each year of the first three years of service and of one month's wages for each year of service thereafter.
2. Said rule of interpretation is applicable to contracts of adhesion where Such worker shall be entitled to payment of leaving indemnity upon a quantum meruit in proportion to the
period of his service completed within a year.
there is already a prepared form containing the stipulations of the
employment contract and the employees merely "take it or leave it."
3. Contractual parties may select the law by which it is to be governed, In such
a case, the foreign law is adopted as a "system" to regulate the relations of
the parties, including questions of their capacity to enter into the contract, the
formalities to be observed by them, matters of performance, and so forth.
BUT they may just agree on applying specific provisions to incorporate,
instead of adopting the whole law.
a. By such reference to the provisions of the foreign law, the contract
does not become a foreign contract to be governed by the foreign
law. The said law does not operate as a statute but as a set of
contractual terms deemed written in the contract.
4. The choice of law must, however, bear some relationship to the parties
or their transaction. There is no question that the contracts sought to be
enforced by Cadalin et al have a direct connection with the Bahrain law
because the services were rendered in that country.

AMIR DECREE NO. 23

Art. 79: . . . A worker shall receive payment for each extra hour equivalent to his wage entitlement
increased by a minimum of twenty-five per centum thereof for hours worked during the day; and by a
minimum of fifty per centum thereof for hours worked during the night which shall be deemed to being
from seven o'clock in the evening until seven o'clock in the morning. . . .

Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.. . . an employer may require a
worker, with his consent, to work on his weekly day of restif circumstances so require and in respect of
which an additional sum equivalent to 150% of his normal wage shall be paid to him. . . .

Art. 81: . . . When conditions of work require the worker to work on any official holiday, he shall be paid
an additional sum equivalent to 150% of his normal wage.

Art. 84: Every worker who has completed one year's continuous service with his employer shall be entitled
to leave on full pay for a period of not less than 21 days for each year increased to a period not less than
28 days after five continuous years of service.
A worker shall be entitled to such leave upon a quantum meruit in respect of the proportion of his service
in that year.

9
The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the
obscurity.
 003 HSBC v. Shernan (Linds) maximum amount of Singapore dollars 200,000.00 (which amount was
Aug. 11, 1989 | Medialdea, J. | Jurisdiction subsequently increased to Singapore dollars 375,000.00) with interest at 3%
over petitioner BANK prime rate, payable monthly, on amounts due under
said overdraft facility.
PETITIONER: HSBC
3. As a security for the repayment by the COMPANY of sums advanced by
RESPONDENTS: Shernan, Reloj, IAC
petitioner BANK to it through the aforesaid overdraft facility, on October 7,
1982, both private respondents and a certain Robin de Clive Lowe, all of
SUMMARY: Eastern applied with the Singaporean branch of the HSBC an
whom were directors of the COMPANY at such time, executed a Joint and
overdraft facility, payable monthly, 3% interest. Directors of Eastern, as security
Several Guarantee in favor of petitioner BANK whereby private respondents
of the overdraft, executed an agreement, saying that all rights and obligations of
and Lowe agreed to pay, jointly and severally, on demand all sums owed by
the said facility shall be cognizable by Singaporean courts, and shall be construed
the COMPANY to petitioner BANK under the aforestated overdraft facility.
by its laws. Eastern failed to pay. HSBC filed a collection case. Eastern moved to
4. The agreement provides that “the guarantee and all rights, obligations and
dismiss, arguing lack of jurisdiction over the subject matter and over their
liabilities arising hereunder shall be construed and determined under and
persons. RTC denied, Eastern filed a Rule 65 petition before the IAC, which the
may be enforced in accordance with the laws of the Republic of
latter court granted.
Singapore. We hereby agree that the Courts of Singapore shall have
jurisdiction over all disputes arising under this guarantee.” (CLAUSE)
The issue is whether the PH courts have jurisdiction. Yes.
5. COMPANY failed to pay. Hence the BANK’s complaint.
6. COMPANY filed a motion to dismiss, raising lack of jurisdiction over the
It must be noted that the motion to dismiss is construed as one raising an improper
subject matter and over their persons, in light of the clause in the said
venue. Venue was properly laid since the agreement did not exclude other courts
agreement.
from taking cognizance of the case. The Court found it hard to think that the
7. RTC denied, ruling that the clause did not exclude other courts from taking
directors, residing here in the PH, would want the case to be tried in SG. The
cognizance of the case, and there had been voluntary appearance of the
Court saw this as a protraction of a just and valid claim. The High Court further
persons of the parties by virtue of filing a motion for extension to file
added that the IAC erred in applying the principle of forum non conveniens.
pleading.
8. MR denied. Shernan and Reloj raised it in the IAC through a Rule 65 Petition
DOCTRINE: One basic principle underlies all rules of jurisdiction in
with a TRO application.
International Law: a State does not have jurisdiction in the absence of some
9. IAC granted. MR of BANK was denied.
reasonable basis for exercising it, whether the proceedings are in rem quasi in rem
or in personam. To be reasonable, the jurisdiction must be based on some
ISSUE/s:
minimum contacts that will not offend traditional notions of fair play and
1. Whether PH courts have jurisdiction. Yes, the agreement did not say that the
substantial justice.
cognizance of SG courts would result to the exclusion of all other courts.
Whether a suit should be entertained or dismissed on the basis of the principle of
RULING: Petition granted.
forum non conveniens depends largely upon the facts of the particular case and is
addressed to the sound discretion of the trial court.
RATIO:

!!!!simple case ok na summary box!!!! As regards Jurisdiction

FACTS: 1. While it is true that "the transaction took place in Singaporean setting" and
1. A complaint for collection of a sum of money was filed by Hongkong and that the Joint and Several Guarantee contains a choice-of-forum clause, the
Shanghai Banking Corporation (BANK) against Jack Robert Sherman and very essence of due process dictates that the stipulation that the "CLAUSE"
Deodato Reloj, before the Regional Trial Court of Quezon City. be liberally construed. One basic principle underlies all rules of
2. It appears that sometime in 1981, Eastern Book Supply Service PTE, Ltd. jurisdiction in International Law: a State does not have jurisdiction in
(COMPANY), a company incorporated in Singapore applied with, and was the absence of some reasonable basis for exercising it, whether the
granted by, the Singapore branch of BANK an overdraft facility in the proceedings are in rem quasi in rem or in personam. To be reasonable,
 the jurisdiction must be based on some minimum contacts that will not Salonga, Private International Law, 1981, p. 49). Thus, the respondent Court
offend traditional notions of fair play and substantial justice (J. Salonga, should not have relied on such principle
Private International Law, 1981, p. 46). Indeed, as pointed-out by petitioner 6. Although the Joint and Several Guarantee prepared by petitioner BANK is a
BANK at the outset, the instant case presents a very odd situation. In the contract of adhesion and that consequently, it cannot be permitted to take a
ordinary habits of life, anyone would be disinclined to litigate before a stand contrary to the stipulations of the contract, substantial bases exist for
foreign tribunal, with more reason as a defendant. However, in this case, petitioner Bank's choice of forum, as discussed earlier.
private respondents are Philippine residents (a fact which was not disputed 7. Lastly, private respondents allege that neither the petitioner based at
by them) who would rather face a complaint against them before a foreign Hongkong nor its Philippine branch is involved in the transaction sued upon.
court and in the process incur considerable expenses, not to mention This is a vain attempt on their part to further thwart the proceedings below
inconvenience, than to have a Philippine court try and resolve the case. inasmuch as well-known is the rule that a defendant cannot plead any defense
Private respondents' stance is hardly comprehensible, unless their ultimate that has not been interposed in the court below.
intent is to evade, or at least delay, the payment of a just obligation.
2. The defense of private respondents that the complaint should have been filed
in Singapore is based merely on technicality. They did not even claim, much
less prove, that the filing of the action here will cause them any unnecessary
trouble, damage, or expense. On the other hand, there is no showing that
petitioner BANK filed the action here just to harass private respondents.
3. The parties did not thereby stipulate that only the courts of Singapore, to the
exclusion of all the rest, has jurisdiction. Neither did the clause in question
operate to divest Philippine courts of jurisdiction. In International Law,
jurisdiction is often defined as the light of a State to exercise authority over
persons and things within its boundaries subject to certain exceptions. Thus,
a State does not assume jurisdiction over travelling sovereigns, ambassadors
and diplomatic representatives of other States, and foreign military units
stationed in or marching through State territory with the permission of the
latter's authorities. This authority, which finds its source in the concept of
sovereignty, is exclusive within and throughout the domain of the State. A
State is competent to take hold of any judicial matter it sees fit by making its
courts and agencies assume jurisdiction over all kinds of cases brought before
them (J. Salonga, Private International Law, 1981, pp. 37-38)

As regards the venue being improperly laid

4. While in the main, the motion to dismiss fails to categorically use with
exactitude the words 'improper venue' it can be perceived from the general
thrust and context of the motion that what is meant is improper venue, The
use of the word 'jurisdiction' was merely an attempt to copy-cat the same
word employed in the guarantee agreement but conveys the concept of venue.
Brushing aside all technicalities, it would appear that jurisdiction was
used loosely as to be synonymous with venue. It is in this spirit that this
Court must view the motion to dismiss.
5. The IAC applied the principle of forum non conveniens in so ruling.
However, whether a suit should be entertained or dismissed on the basis of
the principle of forum non conveniens depends largely upon the facts of the
particular case and is addressed to the sound discretion of the trial court (J.
 004 Saudi Arabian Airlines v. CA (Buenaventura) mentioned items exceeds Two hundred Thousand pesos (P200,000.00).
October 8, 1998 | Quisumbing, J. | Minimum contact Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon City,
PETITIONER: Saudi Arabian Airlines is appropriate:
RESPONDENTS: CA and Milagros P. Morada Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]
SUMMARY: Petitioner SAUDIA hired private respondent MORADA as a flight (b) Personal actions. — All other actions may be commenced and tried where
attendant in 1988, based in Jeddah. On 1990, while on a lay-over in Jakarta, the defendant or any of the defendants resides or may be found, or where the
Indonesia, she went to party with 2 male attendants, and on the following morning plaintiff or any of the plaintiff resides, at the election of the plaintiff.
in their hotel, one of the male attendants attempted to rape her. She was rescued
by hotel attendants who heard her cry for help. The Indonesian police arrested the Weighing the relative claims of the parties, the court a quo found it best to hear
2. the case in the Philippines. Had it refused to take cognizance of the case, it
MORADA returned to Jeddah, but was asked by the company to go back to would be forcing plaintiff (private respondent now) to seek remedial action
Jakarta and help arrange the release of the 2 male attendants. MORADA did not elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains
cooperate when she got to Jakarta. What followed was a series of interrogations substantial connections. That would have caused a fundamental unfairness to
from the Saudi Courts which she did not understand as this was in their her.
language, Arabic. In 1993, she was surprised, upon being ordered by SAUDIA The trial court also acquired jurisdiction over the parties. MORADA through
to go to the Saudi court, that she was being convicted of (1) adultery; (2) going her act of filing, and SAUDIA by praying for the dismissal of the Amended
to a disco, dancing and listening to the music in violation of Islamic laws; and Complaint on grounds other than lack of jurisdiction.
(3) socializing with the male crew, in contravention of Islamic tradition,
sentencing her to five months imprisonment and to 286 lashes. As to the choice of applicable law, we note that choice-of-law problems seek to
SAUDIA denied her the assistance she requested, But because she was answer two important questions:
wrongfully convicted, Prince of Makkah dismissed the case against her and (1) What legal system should control a given situation where some of the
allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was significant facts occurred in two or more states; and
terminated from the service by SAUDIA, without her being informed of the (2) to what extent should the chosen legal system regulate the situation.
cause. Considering that the complaint in the court a quo is one involving torts, the
Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi “connecting factor” or “point of contact” could be the place or places where the
its country manager. tortious conduct or lex loci actus occurred. And applying the torts principle in a
SAUDIA ALLEGES: Private respondent’s claim for alleged abuse of rights conflicts case, we find that the Philippines could be said as a situs of the tort
occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a (the place where the alleged tortious conduct took place). This is because it is in
foreign element qualifies the instant case for the application of the law of the the Philippines where petitioner allegedly deceived private respondent, a
Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule. Filipina residing and working here.
MORADA ALLEGES: Since her Amended Complaint is based on Articles 19
and 21 of the Civil Code, then the instant case is properly a matter of domestic DOCTRINE:
law. In applying “State of the most significant relationship” rule, to determine the
The issue is WON the Philippine courts have jurisdiction to try the case – SC State which has the most significant relationship, the following contacts are to
held YES. SC disagrees with MORADA that his is purely a domestic case. be taken into account and evaluated according to their relative importance with
However, the court finds that the RTC of Quezon City possesses jurisdiction respect to the particular issue: (a) the place where the injury occurred; (b) the
over the subject matter of the suit. Its authority to try and hear the case is place where the conduct causing the injury occurred; (c) the domicile, residence,
provided for under Section 1 of Republic Act No. 7691, to wit: nationality, place of incorporation and place of business of the parties, and (d)
BP129 Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall the place where the relationship, if any, between the parties is centered.
exercise exclusive jurisdiction: Note: See Ratio No. 25 for list of points of contact
(8) In all other cases in which demand, exclusive of interest, damages of
whatever kind, attorney’s fees, litigation expenses, and cots or the value of the
property in controversy exceeds One hundred thousand pesos (P100,000.00) or, FACTS:
in such other cases in Metro Manila, where the demand, exclusive of the above-
1. On January 21, 1988 defendant SAUDIA (Saudi Arabian Airlines) Islamic laws; and (3) socializing with the male crew, in contravention
hired Morada as a Flight Attendant for its airlines based in Jeddah, of Islamic tradition.
Saudi Arabia. 9. Facing conviction, private respondent sought the help of her employer,
2. While on a lay-over in Jakarta, Indonesia, Morada went to a disco petitioner SAUDIA. Unfortunately, she was denied any assistance. She then
dance with fellow crew members Thamer Al-Gazzawi and Allah Al- asked the Philippine Embassy in Jeddah to help her while her case is on
Gazzawi, both Saudi nationals. They agreed to have breakfast together appeal.
at the room of Thamer. When they were in the room, Allah left and 10. Because she was wrongfully convicted, the Prince of Makkah dismissed the
Thamer attempted to rape Morada. Fortunately, a roomboy and several case against her and allowed her to leave Saudi Arabia. Shortly before her
security personnel heard her cries for help and rescued her. Later, the return to Manila, she was terminated from the service by SAUDIA, without
Indonesian police came and arrested Thamer and Allah Al-Gazzawi as her being informed of the cause.
an accomplice. 11. On November 23, 1993, Morada filed a Complaint for damages against
3. When she returned to Jeddah a few days later, several SAUDIA SAUDIA, and Khaled Al-Balawi (Al- Balawi), its country manager in the
officials interrogated her about the Jakarta incident. They then RTC of QC
requested her to go back to Jakarta to help arrange the release of 12. SAUDIA filed an Omnibus Motion To Dismiss which raised the following
Thamer and Allah. grounds, to wit: (1) that the Complaint states no cause of action against
4. She learned that the Indonesian authorities agreed with Saudi Arabia to Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that the
deport Thamer and Allah after two weeks of detention. Eventually, claim or demand set forth in the Complaint has been waived, abandoned or
they were again put in service by defendant SAUDIA. Morada was otherwise extinguished; and (4) that the trial court has no jurisdiction to try
then transferred to Manila the case.
5. Her superiors requested her to see Mr. Ali Meniewy, Chief Legal 13. Morada filed an Amended Complaint wherein Al-Balawi was dropped as
Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he party defendant. On August 11, 1994, Saudia filed its Manifestation and
brought her to the police station where the police took her passport and Motion to Dismiss Amended Complaint
questioned her about the Jakarta incident. Miniewy simply stood by as 14. The trial court issued an Order dated August 29, 1994 denying the Motion to
the police put pressure on her to make a statement dropping the case Dismiss Amended Complaint filed by Saudia.
against Thamer and Allah. Not until she agreed to do so did the police 15. From the Order of RTC Judge denying the Motion to Dismiss, SAUDIA filed
return her passport and allowed her to catch the afternoon flight out of an MR alleging that the trial court has no jurisdiction to hear and try the case
Jeddah. on the basis of Article 21 of the Civil Code, since the proper law applicable
6. One year and a half later in Riyadh, Saudi Arabia, a few minutes is the law of the Kingdom of Saudi Arabia.
before the departure of her flight to Manila, Morada was not allowed to 16. RTC Judge subsequently issued another Order dated February 2, 1995,
board the plane and instead ordered to take a later flight to Jeddah to denying SAUDIAs MR.
see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, 17. SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for
a certain Khalid of the SAUDIA office brought her to a Saudi court Issuance of Writ of Preliminary Injunction and/or Temporary Restraining
where she was asked to sign a document written in Arabic. Order with the Court of Appeals.
7. SAUDIA summoned plaintiff to report to Jeddah once again and see 18. Court of Appeals rendered the Decision dated April 10, 1996, now also
Miniewy for further investigation. Plaintiff did so after receiving assailed. It ruled that the Philippines is an appropriate forum considering that
assurance from SAUDIAs Manila manager, Aslam Saleemi, that the the Amended Complaints basis for recovery of damages is Article 21 of the
investigation was routinary and that it posed no danger to her. Civil Code, and thus, clearly within the jurisdiction of respondent Court. It
8. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the further held that certiorari is not the proper remedy in a denial of a Motion
same court where the judge, to her astonishment and shock, rendered a to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in
decision, translated to her in English, sentencing her to five months case of an adverse ruling, find recourse in an appeal.
imprisonment and to 286 lashes. Only then did she realize that the ISSUES:
Saudi court had tried her, together with Thamer and Allah, for what 1. WoN the RTC of QC has jurisdiction to hear and try civil case. – YES, rules
happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) of court provides plaintiff can elect the venue, also SAUDIA voluntarily
going to a disco, dancing and listening to the music in violation of
 submitted to the jurisdiction of the RTC because of filing motions to dismiss 8. After a careful study of Morada’s Amended Complaint, and the Comment
other than lack of jurisdiction. thereon, we note that she aptly predicated her cause of action on Articles 19
2. WoN CA erred in ruling that Philippine law should govern. – NO, the basis and 21 of the New Civil Code.
of the damages suit was Article 19 and 21 of the Civil Code 9. Thus, in Philippine National Bank (PNB) vs. Court of Appeals, his Court held
that: The provisions on human relations were intended to expand the concept
RULING: WHEREFORE, the instant petition for certiorari is hereby of torts in this jurisdiction by granting adequate legal remedy for the untold
DISMISSED. Civil Case No. Q-93-18394 entitled Milagros P. Morada vs. Saudi number of moral wrongs which is impossible for human foresight to
Arabia Airlines is hereby REMANDED to Regional Trial Court of Quezon City, specifically provide in the statutes.
Branch 89 for further proceedings. SO ORDERED. 10. We find that the Regional Trial Court (RTC) of Quezon City possesses
jurisdiction over the subject matter of the suit. Its authority to try and hear the
case is provided for under Section 1 of Republic Act No. 7691, to wit:
RATIO: 11. Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known
as the Judiciary Reorganization Act of 1980, is hereby amended to
1. Petitioner SAUDIA claims that before us is a conflict of laws that must be read as follows:
settled at the outset. It maintains that private respondents claim for alleged 12. SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise
abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the exclusive jurisdiction:
existence of a foreign element qualifies the instant case for the application of 13. (8) In all other cases in which demand, exclusive of interest, damages of
the law of the Kingdom of Saudi Arabia, by virtue of the lex loci delicti whatever kind, attorneys fees, litigation expenses, and costs or the value of
commissi rule. the property in controversy exceeds One hundred thousand pesos
2. On the other hand, Morada contends that since her Amended Complaint is (P100,000.00) or, in such other cases in Metro Manila, where the demand,
based on Articles 19 and 21 of the Civil Code, then the instant case is properly exclusive of the above-mentioned items exceeds Two hundred Thousand
a matter of domestic law. pesos (P200,000.00).
3. Under the factual antecedents obtaining in this case, there is no dispute that 14. And following Section 2 (b), Rule 4 of the Revised Rules of Courtthe venue,
the interplay of events occurred in two states, the Philippines and Saudi Quezon City, is appropriate:
Arabia. SEC. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
4. Where the factual antecedents satisfactorily establish the existence of a (b) Personal actions. All other actions may be commenced and tried
foreign element, we agree with SAUDIA that the problem herein could where the defendant or any of the defendants resides or may be
present a conflicts case. found, or where the plaintiff or any of the plaintiff resides, at the
5. A factual situation that cuts across territorial lines and is affected by the election of the plaintiff.
diverse laws of two or more states is said to contain a foreign element. The 15. Weighing the relative claims of the parties, the court a quo found it best to
presence of a foreign element is inevitable since social and economic affairs hear the case in the Philippines. Had it refused to take cognizance of the case,
of individuals and associations are rarely confined to the geographic limits of it would be forcing plaintiff (Morada) to seek remedial action elsewhere, i.e.
their birth or conception. in the Kingdom of Saudi Arabia where she no longer maintains substantial
6. In the instant case, the foreign element consisted in the fact that private connections. That would have caused a fundamental unfairness to her.
respondent Morada is a resident Philippine national, and that petitioner 16. Similarly, the trial court also possesses jurisdiction over the persons of the
SAUDIA is a resident foreign corporation. Also, by virtue of the employment parties herein. By filing her Complaint and Amended Complaint with the trial
of Morada with the petitioner Saudia as a flight stewardess, events did court, private respondent has voluntary submitted herself to the jurisdiction
transpire during her many occasions of travel across national borders, of the court.
particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, 17. The records show that petitioner SAUDIA has filed several motions praying
that caused a conflicts situation to arise. for the dismissal of Moradas Amended Complaint. SAUDIA also filed an
7. We thus find Morada’s assertion that the case is purely domestic, Answer In Ex Abundante Cautelam dated February 20, 1995. Undeniably,
imprecise. A conflicts problem presents itself here, and the question of petitioner SAUDIA has effectively submitted to the trial courts jurisdiction
jurisdiction confronts the court a quo. by praying for the dismissal of the Amended Complaint on grounds other
than lack of jurisdiction.
18. Clearly, SAUDIA had submitted to the jurisdiction of the Regional Trial (6) the intention of the contracting parties as to the law that
Court of Quezon City. Thus, we find that the trial court has jurisdiction over should govern their agreement, the lex loci intentionis;
the case and that its exercise thereof, justified. (7) the place where judicial or administrative proceedings are
19. As to the choice of applicable law, we note that choice-of-law problems seek instituted or done. The lex forithe law of the forumis
to answer two important questions: (1) What legal system should control a particularly important because, as we have seen earlier,
given situation where some of the significant facts occurred in two or more matters of procedure not going to the substance of the claim
states; and (2) to what extent should the chosen legal system regulate the involved are governed by it; and because the lex fori applies
situation. whenever the content of the otherwise applicable foreign law
20. Several theories have been propounded in order to identify the legal system is excluded from application in a given case for the reason
that should ultimately control. Although ideally, all choice-of-law theories that it falls under one of the exceptions to the applications of
should intrinsically advance both notions of justice and predictability, they foreign law; and
do not always do so. The forum is then faced with the problem of deciding (8) the flag of a ship, which in many cases is decisive of
which of these two important values should be stressed. practically all legal relationships of the ship and of its master
21. Before a choice can be made, it is necessary for us to determine under what or owner as such. It also covers contractual relationships
category a certain set of facts or rules fall. This process is known as particularly contracts of affreightment.
characterization, or the doctrine of qualification. It is the process of deciding 24. Considering that the complaint in the court a quo is one involving torts, the
whether or not the facts relate to the kind of question specified in a conflicts connecting factor or point of contact could be the place or places where
rule. The purpose of characterization is to enable the forum to select the the tortious conduct or lex loci actus occurred. And applying the torts
proper law. principle in a conflicts case, we find that the Philippines could be said as
22. Our starting point of analysis here is not a legal relation, but a factual a situs of the tort (the place where the alleged tortious conduct took
situation, event, or operative fact. An essential element of conflict rules is place).This is because it is in the Philippines where petitioner allegedly
the indication of a test or connecting factor or point of contact. Choice- deceived private respondent, a Filipina residing and working
of-law rules invariably consist of a factual relationship (such as property here. According to her, she had honestly believed that petitioner would, in
right, contract claim) and a connecting factor or point of contact, such the exercise of its rights and in the performance of its duties, act with justice,
as the situs of the res, the place of celebration, the place of performance, give her her due and observe honesty and good faith. Instead, SAUDIA failed
or the place of wrongdoing. to protect her.
23. Note that one or more circumstances may be present to serve as the possible 25. Moreover, with the widespread criticism of the traditional rule of lex loci
test for the determination of the applicable law. These test factors or points delicti commissi, modern theories and rules on tort liability have been
of contact or connecting factors could be any of the following: advanced to offer fresh judicial approaches to arrive at just results. In keeping
(1) The nationality of a person, his domicile, his residence, his abreast with the modern theories on tort liability, we find here an occasion to
place of sojourn, or his origin; apply the State of the most significant relationship rule, which in our view
(2) the seat of a legal or juridical person, such as a corporation; should be appropriate to apply now, given the factual context of this case.
(3) the situs of a thing, that is, the place where a thing is, or is 26. In applying “State of the most significant relationship” to determine the State
deemed to be situated. In particular, the lex situs is decisive which has the most significant relationship, the following contacts are to
when real rights are involved; be taken into account and evaluated according to their relative
(4) the place where an act has been done, the locus actus, importance with respect to the particular issue: (a) the place where the
such as the place where a contract has been made, a injury occurred; (b) the place where the conduct causing the injury
marriage celebrated, a will signed or a tort occurred; (c) the domicile, residence, nationality, place of incorporation
committed. The lex loci actus is particularly important in and place of business of the parties, and (d) the place where the
contracts and torts; relationship, if any, between the parties is centered.
(5) the place where an act is intended to come into effect, e.g., 27. As already discussed, there is basis for the claim that over-all injury occurred
the place of performance of contractual duties, or the place and lodged in the Philippines. There is likewise no question that private
where a power of attorney is to be exercised; respondent is a resident Filipina national, working with petitioner, a resident
foreign corporation engaged here in the business of international air
carriage. Thus, the relationship between the parties was centered here,
although it should be stressed that this suit is not based on mere labor law
violations. From the record, the claim that the Philippines has the most
significant contact with the matter in this dispute, raised by private
respondent as plaintiff below against defendant (herein petitioner), in our
view, has been properly established.
 005 Hasegawa v. Kitamura (CELAJE) resolution of conflicts problems, the choice of law. Thus, such
principles/choice-of-law rules cannot be use to assail the jurisdiction of a court.
G.R. No. 149177 | November 23, 2007 | Nachura, J. | Three Phrases in Judicial
Resolution of Conflicts Problems
FACTS:
PETITIONER: KAZUHIRO HASEGAWA AND NIPPON ENGINEERING
1. On March 30, 1999, petitioner Nippon Engineering Consultants Co., Ltd.
CONSULTANTS CO., LTD.
(Nippon), a Japanese consultancy firm providing technical and management
RESPONDENTS: MINORU KITAMURA support in the infrastructure projects of foreign governments, entered into an
Independent Contractor Agreement (ICA) with respondent Minoru Kitamura,
SUMMARY: Respondent Kitamura was hired by petitioner Hasegawa and a Japanese national permanently residing in the Philippines.
Nippon, through an Independent Contractor Agreement executed in Japan, to
provide professional services for a couple of infrastructure projects between 2. The agreement provides that respondent Kitamura was to extend professional
petitioner Nippon and the Philippine Government. Eventually respondent services to Nippon for a year starting on April 1, 1999. Nippon then assigned
Kitamura was terminated, so respondent Kitamura filed a civil case for specific respondent Kitamura to work as the project manager of the Southern Tagalog
performance and damages against petitioner Nippon in the RTC of Lipa City for Access Road (STAR) Project in the Philippines, following the company's
improper termination. Petitioner Nippon claims that based on the principles of consultancy contract with the Philippine Government.
lex loci celebrationis, lex contractus, and the “state of the most significant
3. When the STAR Project was near completion, the DPWH engaged the
relationship rule, the RTC of Lipa City does not have jurisdiction over the case
consultancy services of Nippon, on January 28, 2000, this time for the
and thus petitioner Nippon filed a motion to dismiss based on lack of
detailed engineering and construction supervision of the Bongabon-Baler
jurisdiction.
Road Improvement (BBRI) Project. Respondent Kitamura was named as the
Issue: W/N the jurisdiction of RTC of Lipa City can be assailed based on the project manager.
principles asserted by petitioner Nippon. No. In the judicial resolution of
4. On February 28, 2000, petitioner Kazuhiro Hasegawa, Nippon's general
conflicts problems, three consecutive phases are involved: jurisdiction, choice
manager for its International Division, informed respondent Kitamura that
of law, and recognition and enforcement of judgments. Jurisdiction in the
the company had no more intention of automatically renewing his ICA. His
Philippines is determined by the laws of the Philippines. To succeed in its
services would be engaged by the company only up to the substantial
motion for the dismissal of an action for lack of jurisdiction over the subject
completion of the STAR Project on March 31, 2000, just in time for the ICA's
matter of the claim, the movant must show that the court or tribunal cannot act
expiry.
on the matter submitted to it because no law grants it the power to adjudicate
the claims. Petitioner Nippon is not claiming that there is no law granting the 5. Threatened with impending unemployment, respondent Kitamura requested
RTC of Lipa City the jurisdiction to hear the case at hand. Rather, petitioner a negotiation conference and demanded that he be assigned to the BBRI
Nippon is asserting principles pertaining to the second phase of judicial project. Nippon insisted that respondent Kitamura’s contract was for a fixed
resolution of conflict problems, which is the choosing of which law to apply to term that had already expired, and refused to negotiate for the renewal of the
the dispute. Indeed, these choice-of-law principles determine which state's law ICA.
is to be applied in resolving the substantive issues of a conflicts problem.
6. Thus, respondent Kitamura consequently initiated on June 1, 2000 a Civil
Necessarily, as the only issue in this case is that of jurisdiction, choice-of-law
Case for specific performance and damages with the RTC of Lipa City.
rules are not only inapplicable but also not yet called for. Forum non conveniens
is also not a proper ground to dismiss a case because first it is not a ground 7. For their part, petitioners Nippon, contending that the ICA had been perfected
under the rules and second it requires factual determination and thus better in Japan and executed by and between Japanese nationals, moved to dismiss
suited as a defense. the complaint for lack of jurisdiction. They asserted that the claim for
improper pre-termination of respondent's ICA could only be heard and
DOCTRINE: Since the principles of lex loci celebrationis, lex contractus,
ventilated in the proper courts of Japan following the principles of lex loci
and the “state of the most significant relationship rule,” refer to which law is
celebrationis and lex contractus.
applicable to a dispute, they are rules proper for the second phase of judicial
8. On June 29, 2000, the RTC, invoking our ruling in Insular Government v. Frank that matters
connected with the performance of contracts are regulated by the law prevailing at the place of
 performance, denied the motion to dismiss. On appeal, the CA affirmed. Hence this petition. performance and damages is one not capable of pecuniary estimation and is
ISSUES: properly cognizable by the RTC of Lipa City.

1. W/N the subject matter jurisdiction of Philippine courts in civil cases for 7. What they rather raise as grounds to question subject matter jurisdiction are
specific performance and damages involving contracts executed outside the the principles of lex loci celebrationis and lex contractus, and the “state of
country by foreign nationals may be assailed on the principles of lex loci the most significant relationship rule.”
celebrationis, lex contractus, and the “state of the most significant 8. The Court finds the invocation of these grounds unsound.
relationship rule." No, such principles cannot be use to assail the jurisdiction
of a court, since such principles are only proper in ascertaining which law to 9. Lex loci celebrationis relates to the “law of the place of the ceremony” or the
apply to a dispute. law of the place where a contract is made. The doctrine of lex
contractus or lex loci contractus means the “law of the place where a contract
RULING: WHEREFORE, premises considered, the petition for review is executed or to be performed.” It controls the nature, construction, and
on certiorari is DENIED. validity of the contract and it may pertain to the law voluntarily agreed upon
RATIO: by the parties or the law intended by them either expressly or implicitly.

1. In the judicial resolution of conflicts problems, three consecutive phases are 10. Under the “state of the most significant relationship rule,” to ascertain what
involved: jurisdiction, choice of law, and recognition and enforcement of state law to apply to a dispute, the court should determine which state has the
judgments. Corresponding to these phases are the following questions: (1) most substantial connection to the occurrence and the parties. In a case
Where can or should litigation be initiated? (2) Which law will the court involving a contract, the court should consider where the contract was made,
apply? and (3) Where can the resulting judgment be enforced? was negotiated, was to be performed, and the domicile, place of business, or
place of incorporation of the parties.
2. Analytically, jurisdiction and choice of law are two distinct concepts
Jurisdiction considers whether it is fair to cause a defendant to travel to this 11. Since these three principles in conflict of laws make reference to the law
state; choice of law asks the further question whether the application of a applicable to a dispute, they are rules proper for the second phase, the choice
substantive law which will determine the merits of the case is fair to both of law. They determine which state's law is to be applied in resolving the
parties. substantive issues of a conflicts problem. Necessarily, as the only issue in this
case is that of jurisdiction, choice-of-law rules are not only inapplicable but
3. The power to exercise jurisdiction does not automatically give a state also not yet called for.
constitutional authority to apply forum law. The question of whether the law
of a state can be applied to a transaction is different from the question of 12. Further, petitioner Nippon's premature invocation of choice-of-law rules is
whether the courts of that state have jurisdiction to enter a judgment. exposed by the fact that they have not yet pointed out any conflict between
the laws of Japan and ours. Before determining which law should apply,
4. In this case, only the first phase is at issue—jurisdiction. In assailing the trial first there should exist a conflict of laws situation requiring the
court's jurisdiction herein, petitioners are actually referring to subject matter application of the conflict of laws rules. Also, when the law of a foreign
jurisdiction. Jurisdiction over the subject matter in a judicial proceeding is country is invoked to provide the proper rules for the solution of a case, the
conferred by the sovereign authority which establishes and organizes the existence of such law must be pleaded and proved.
court. It is given only by law and in the manner prescribed by law. It is further
determined by the allegations of the complaint. 13. Neither can the other ground raised, forum non conveniens, be used to deprive
the trial court of its jurisdiction herein. First, it is not a proper basis for a
5. To succeed in its motion for the dismissal of an action for lack of jurisdiction motion to dismiss because Section 1, Rule 16 of the Rules of Court does not
over the subject matter of the claim, the movant must show that the court or include it as a ground.
tribunal cannot act on the matter submitted to it because no law grants it the
power to adjudicate the claims. 14. Second, whether a suit should be entertained or dismissed on the basis of the
said doctrine depends largely upon the facts of the particular case and is
6. In the instant case, petitioners Nippon, in their motion to dismiss, do not claim addressed to the sound discretion of the trial court. In this case, the RTC
that the trial court is not properly vested by law with jurisdiction to hear the decided to assume jurisdiction. Third, the propriety of dismissing a case
subject controversy for, indeed, Civil Case No. 00-0264 for specific based on this principle requires a factual determination; hence, this conflicts
 principle is more properly considered a matter of defense.
15. Accordingly, since the RTC is vested by law with the power to entertain and
hear the civil case and the grounds raised by petitioners Nippon to assail that
jurisdiction are inappropriate, the RTC and CA correctly denied petitioner
Nippon’s motion to dismiss.
 06 INTERNATIONAL SHOE v. WASHINGTON (CRUZ) FACTS:
December 3, 1945 | Stone, CJ. | Jurisdiction over the Person 10. International Shoe Co. was a business incorporated in Delaware with its
principal place of business in Missouri.
PETITIONER: International Shoe Co. 11. During the years from 1937 to 1940, it employed eleven to thirteen salesmen
RESPONDENTS: State of Washington, Office of the Unemployment under direct supervision and control of sales managers located in St. Louis.
Compensation & Placement These salesmen resided in Washington; their principal activities were
confined to that state, and they were compensated by commissions based
upon the amount of their sales. The commissions for each year totaled more
SUMMARY: The state of Washington enacted a tax on companies doing than $31,000.
business there that functioned as a mandatory contribution to its Unemployment 12. International Shoe supplies its salesmen with a line of samples, each
Compensation Fund. International Shoe Co., a business incorporated in Delaware consisting of one shoe of a pair, which they display to prospective purchasers.
with its principal place of business in Missouri, employed about a dozen salesmen On occasion, they rent permanent sample rooms, for exhibiting samples, in
in the state of Washington, who were residents of that state paid by commissions business buildings, or rent rooms in hotels or business buildings temporarily
on their sales. It Shoe failed to comply with the tax International Shoe also insists for that purpose. The cost of such rentals is reimbursed by International Shoe.
that its activities within the state were not sufficient to manifest its "presence" 13. The authority of the salesmen is limited to exhibiting their samples and
there, and that, in its absence, the state courts were without jurisdiction, that, soliciting orders from prospective buyers, at prices and on terms fixed by
consequently, it was a denial of due process for the state to subject International International Shoe. The salesmen transmit the orders to International Shoe's
Shoe to suit. It refers to those cases in which it was said that the mere solicitation office in St. Louis for acceptance or rejection, and, when accepted, the
of orders for the purchase of goods within a state, to be accepted without the state merchandise for filling the orders is shipped f.o.b. from points outside
and filled by shipment of the purchased goods interstate, does not render the Washington to the purchasers within the state. All the merchandise shipped
corporation seller amenable to suit within the state. And International Shoe into Washington is invoiced at the place of shipment, from which collections
further argues that, since it was not present within the state, it is a denial of due are made. No salesman has authority to enter into contracts or to make
process to subject it to taxation or other money exaction. It thus denies the power collections.
of the state to lay the tax or to subject International Shoe to a suit for its collection. 14. International Shoe did not own any property or have a permanent location in
The issue in this case is WoN, w/in the limitations of de process International Washington, since the salesmen used hotels and rented spaces to interact with
Shoe, a Delaware corporation, has, by its activities in the State of potential clients.
Washington, rendered itself amenable to proceedings in the courts of that a. This system was designed to restrict the company's location to
state to recover unpaid contributions to the state unemployment Missouri, although the business earned about $30,000 annually from
compensation fund. The SC ruled in the affirmative. The activities in behalf of customers in Washington.
the corporation render it amenable to suit in courts of the State to recover 15. The state of Washington enacted a comprehensive scheme of unemployment
payments due to the state unemployment compensation fund. The activities in compensation, a tax on companies doing business there that functioned as a
question established between the State and the corporation sufficient contacts or mandatory contribution to its Unemployment Compensation Fund.
ties to make it reasonable and just, and in conformity to the due process 16. When International Shoe failed to comply with the tax, Washington served a
requirements of the 14th Amendment, for the State to enforce against the notice of assessment on one of the resident salesmen and sent a letter by
corporation an obligation arising out of such activities. In such a suit to recover registered mail to the company's Missouri headquarters.
payments due to the unemployment compensation fund, service of process upon 17. International Shoe tried to forestall the case at the outset by moving that it be
one of the corporation's salesmen within the State, and notice sent by registered dismissed for a lack of personal jurisdiction.
mail to the corporation at its home office, satisfies the requirements of due
process. ISSUE/s:
2. WoN within the limitations of the due process clause of the 14th
DOCTRINE: Due process requires only that, in order to subject a defendant to a Amendment, International Shoe, a Delaware corporation, has, by its
judgment in personam, if he be not present within the territory of the forum, he activities in the State of Washington, rendered itself amenable to
have certain minimum contacts with it such that the maintenance of the suit does proceedings in the courts of that state to recover unpaid contributions to
not offend "traditional notions of fair play and substantial justice. the state unemployment compensation fund exacted by Washington
 Unemployment Compensation Act– YES, The activities in behalf of the b. International Shoe was not a corporation of the State of Washington,
corporation render it amenable to suit in courts of the State to recover and was not doing business within the state;
payments due to the state unemployment compensation fund c. it had no agent within the state upon whom service could be made;
3. WON the state can exact those contributions consistently with the due and
process clause of the 14th Amendment – YES, The tax imposed by the state d. International Shoe is not an employer and does not furnish
unemployment compensation statute -- construed by the state court, in its employment within the meaning of the statute.
application to the corporation, as a tax on the privilege of employing 4. The motion was heard on evidence and a stipulation of facts by the appeal
salesmen within the State -- does not violate the due process clause of the tribunal, which denied the motion and ruled that Commissioner was entitled
Fourteenth Amendment to recover the unpaid contributions.
5. That action was affirmed by the Commissioner; both the Superior Court and
RULING: APPEAL from a judgment upholding the constitutionality of a state the Supreme Court affirmed.
unemployment compensation statute as applied to the appellant corporation, affirmed. 6. The Supreme Court of Washington was of opinion that the regular and
systematic solicitation of orders in the state by International Shoe's salesmen,
RATIO: resulting in a continuous flow of International Shoe's product into the state,
1. The statutes in question set up a comprehensive scheme of unemployment was sufficient to constitute doing business in the state so as to make
compensation, the costs of which are defrayed by contributions required to International Shoe amenable to suit in its courts.
be made by employers to a state unemployment compensation fund. 7. But it was also of opinion that there were sufficient additional activities
a. The contributions are a specified percentage of the wages payable shown to bring the case within the rule, frequently stated, that solicitation
annually by each employer for his employees' services in the state. within a state by the agents of a foreign corporation plus some additional
b. The assessment and collection of the contributions and the fund are activities there are sufficient to render the corporation amenable to suit
administered by Commissioner of the Unemployment brought in the courts of the state to enforce an obligation arising out of its
Compensation & Placement (Commissioner). activities there.
c. Section 14(c) of the Act authorizes Commissioner: a. the salesmen's display of samples sometimes in permanent display
i. to issue an order and notice of assessment of delinquent rooms, and
contributions upon prescribed personal service of the b. the salesmen's residence within the state, continued over a period of
notice upon the employer if found within the state, or, if years, all resulting in a substantial volume of merchandise regularly
not so found, by mailing the notice to the employer by shipped by International Shoe to purchasers within the state.
registered mail at his last known address. 8. The court also held that the statute, as applied, did not invade the
ii. to collect the assessment by distraint if it is not paid within constitutional power of Congress to regulate interstate commerce, and did not
ten days after service of the notice. impose a prohibited burden on such commerce.
d. By § 14e and 6b, the order of assessment may be administratively 9. International Shoe 's argument, renewed here, that the statute imposes an
reviewed by an appeal tribunal within the office of unemployment unconstitutional burden on interstate commerce need not detain us. US Code
upon petition of the employer, and this determination is, by § 6i, § 1606(a) provides that
made subject to judicial review on questions of law by the state "No person required under a State law to make payments to an
Superior Court, with further right of appeal in the state Supreme unemployment fund shall be relieved from compliance therewith on
Court, as in other civil cases. the ground that he is engaged in interstate or foreign commerce, or
2. In this case, notice of assessment for the years in question was personally that the State law does not distinguish between employees engaged
served upon a sales solicitor employed by International Shoe in Washington, in interstate or foreign commerce and those engaged in intrastate
and a copy of the notice was mailed by registered mail to a its address in St. commerce."
Louis, Missouri.
3. International Shoe appeared specially before the office of unemployment, and 10. It is no longer debatable that Congress, in the exercise of the commerce
moved to set aside the order and notice of assessment on the ground that: power, may authorize the states, in specified ways, to regulate interstate
a. the service upon it's salesman was not proper service; commerce or impose burdens upon it.
11. International Shoe insists that its activities within the state were not sufficient i. the commission of some single or occasional acts of the
to manifest its "presence" there, and that, in its absence, the state courts were corporate agent because of their nature and quality and the
without jurisdiction, that, consequently, it was a denial of due process for the circumstances of their commission, may be deemed
state to subject International Shoe to suit and since it was not present within sufficient to render the corporation liable to suit
the state, it is a denial of due process to subject it to taxation or other money ii. Some of the decisions holding the corporation amenable to
exaction. It thus denies the power of the state to lay the tax or to subject suit have been supported by resort to the legal fiction that
International Shoe to a suit for its collection. it has given its consent to service and suit, consent being
12. Historically, the jurisdiction of courts to render judgment in personam is implied from its presence in the state through the acts of its
grounded on their de facto power over the defendant's person. authorized agents. But, more realistically, it may be said
a. Hence, his presence within the territorial jurisdiction of a court was that those authorized acts were of such a nature as to justify
prerequisite to its rendition of a judgment personally binding him. the fiction.
13. But now that the capias ad respondendum has given way to personal 15. Test: Whether due process is satisfied must depend upon the quality and
service of summons or other form of notice, due process requires only nature of the activity in relation to the fair and orderly administration
that, in order to subject a defendant to a judgment in personam, if he be of the laws which it was the purpose of the due process clause to insure.
not present within the territory of the forum, he have certain minimum a. That clause does not contemplate that a state may make binding a
contacts with it such that the maintenance of the suit does not offend judgment in personam against an individual or corporate defendant
"traditional notions of fair play and substantial justice." with which the state has no contacts, ties, or relations. But, to the
14. Since the corporate personality is a fiction, although a fiction intended to be extent that a corporation exercises the privilege of conducting
acted upon as though it were a fact. It is clear that, unlike an individual, its activities within a state, it enjoys the benefits and protection of the
"presence" without, as well as within, the state of its origin can be manifested laws of that state.
only by activities carried on in its behalf by those who are authorized to act b. The exercise of that privilege may give rise to obligations, and, so
for it. far as those obligations arise out of or are connected with the
a. The terms "present" or "presence" are used merely to symbolize activities within the state, a procedure which requires the
activities of the corporation's agent within the state which courts will corporation to respond to a suit brought to enforce them can, in most
deem to be sufficient to satisfy the demands of due process. instances, hardly be said to be undue.
b. Demands may be met by such contacts of the corporation with the 16. Applying these standards, the activities carried on in behalf of International
state of the forum as make it reasonable to require the corporation Shoe in Washington were neither irregular nor casual.
to defend the particular suit which is brought there. An "estimate of a. They were systematic and continuous throughout the years in
the inconveniences" which would result to the corporation from a question.
trial away from its "home" or principal place of business is relevant b. They resulted in a large volume of interstate business, in the course
in this connection. of which International Shoe received the benefits and protection of
c. "Presence" in the state in this sense has never been doubted when the laws of the state, including the right to resort to the courts for the
the activities of the corporation there have not only been continuous enforcement of its rights. The obligation which is here sued upon
and systematic, but also give rise to the liabilities sued on, even arose out of those very activities.
though no consent to be sued or authorization to an agent to accept c. It is evident that these operations establish sufficient contacts or ties
service of process has been given. with the state of the forum to make it reasonable and just, according
d. While it has been held, in cases on which International Shoe relies, to our traditional conception of fair play and substantial justice, to
that continuous activity of some sorts within a state is not enough to permit the state to enforce the obligations which appellant has
support the demand that the corporation be amenable to suits incurred there.
unrelated to that activity, there have been instances in which the d. Hence, we cannot say that the maintenance of the present suit in the
continuous corporate operations within a state were thought so State of Washington involves an unreasonable or undue procedure.
substantial and of such a nature as to justify suit against causes of 17. The Court is likewise unable to conclude that the service of the process within
action arising from dealings distinct from those activities. the state upon an agent whose activities establish International Shoe 's
"presence" there was not sufficient notice of the suit, or that the suit was so
 unrelated to those activities as to make the agent an inappropriate vehicle for
communicating the notice.
a. It is enough that International Shoe has established such contacts
with the state that the particular form of substituted service adopted
there gives reasonable assurance that the notice will be actual.
b. The mailing of the notice of suit to International Shoe by registered
mail at its home office was reasonably calculated to apprise
International Shoe of the suit.
18. Only a word need be said of International Shoe's liability for the demanded
contributions to the state unemployment fund.
19. The statute imposing tax on the privilege of employing International Shoe's
salesmen within the state measured by a percentage of the wages, here, the
commissions payable to the salesmen is constitutionally valid
a. The right to employ labor has been deemed an appropriate subject
of taxation in this country and England, both before and since the
adoption of the Constitution. And such a tax imposed upon the
employer for unemployment benefits is within the constitutional
power of the states.
20. International Shoe having rendered itself amenable to suit upon obligations
arising out of the activities of its salesmen in Washington, the state may
maintain the present suit in personam to collect the tax laid upon the exercise
of the privilege of employing it's salesmen within the state.
a. For Washington has made one of those activities which, taken
together, establish International Shoe's "presence" there for
purposes of suit the taxable event by which the state brings appellant
within the reach of its taxing power.
b. The state thus has constitutional power to lay the tax and to subject
appellant to a suit to recover it. The activities which establish its
"presence" subject it alike to taxation by the state and to suit to
recover the tax.
 007 Perkins v Benguet Consolidated Mining Co. (DAGUMAN) by the Japanese. During that interim the president, who was also the general
March 3, 1952 | Burton, J. |Jurisdiction over the Person manager and principal stockholder of the company, returned to his home in
Clermont County, Ohio. There he maintained an office in which he conducted
PETITIONER: Idonah Slade Perkins his personal affairs and did many things on behalf of the company. He kept
RESPONDENTS: Benguet Consolidated Mining Co. there office files of the company. He carried on there correspondence relating
SUMMARY: Perkins, a non-resident of Ohio, filed 2 actions in personam in to the business of the company and to its employees. He drew and distributed
the Court of Ohio against Benguet Consolidated Mining. In one action, Perkins there salary checks on behalf of the company, both in his own favor as
seeks 68,400 dollars in dividends claimed to be due to her as a stockholder. She president and in favor of two company secretaries who worked there with
also claims 2.5M dollars damages largely because of the company’s failure to him. He used and maintained in Clermont County, Ohio, two active bank
issue her the certificates for 120k shares of its stock. During the Japanese accounts carrying substantial balances of company funds. A bank in
Occupation in the PH, Benguet’s president relocated to an office in Ohio to Hamilton County, Ohio, acted as transfer agent for the stock of the company.
conduct the company’s business. After Benguet was served with summons, he Several directors' meetings were held at his office or home in Clermont
sought a motion to quash on the basis of lack of jurisdiction. The trial court County. From that office he supervised policies dealing with the
sustained a motion to quash the service of summons on the mining company. rehabilitation of the corporation's properties in the Philippines and he
The CA of Ohio affirmed that decision as did the Supreme Court. We have to dispatched funds to cover purchases of machinery for such rehabilitation. In
take note that Perkin’s cause of action did not arise in Ohio and did not relate to sum, he carried on in Ohio a continuous and systematic supervision of the
the company’s activities there. ISSUE: WoN the Due Process Clause of the US necessarily limited wartime activities of the company. He there discharged
Constitutional Amendment XIV precluded Ohio from subjecting a foreign his duties as president and general manager, both during the occupation of
corporation to the jurisdiction of its courts in an action in personam? NO. The the company's properties by the Japanese and immediately thereafter
US SC held that the company’s continuous and systematic in-state activities, 3. After Benguet was served with summons, he sought a motion to quash on the
including director’s meetings, business correspondence, banking stock transfers, basis of lack of jurisdiction. The trial court sustained a motion to quash the
and payment of salaries, were enough to make it fair and reasonable to subject service of summons on the mining company. The CA of Ohio affirmed that
the company to proceedings in personam, at least insofar as the proceedings decision as did the Supreme Court. We have to take note that Perkin’s cause
sought to enforce causes of action related to those very activities or to other of action did not arise in Ohio and did not relate to the company’s activities
activities within the state. As such, it did not violate federal due process for there
Ohio to either take or decline jurisdiction of the company.
DOCTRINE: ISSUES: 1. WoN the Due Process Clause of the US Constitutional Amendment XIV
Federal due process is not violated in either taking or declining jurisdiction of a precluded Ohio from subjecting a foreign corporation to the jurisdiction of its courts
foreign corporation when the foreign corporation’s supervision of a business is in an action in personam? NO. The US SC held that the company’s continuous and
carried on continuously and systematically within a state. In other words, a systematic in-state activities, including director’s meetings, business correspondence,
state may exercise personal jurisdiction over a foreign corporation even banking stock transfers, and payment of salaries, were enough to make it fair and
when the cause of action does not arise in the state or relate to any of the reasonable to subject the company to proceedings in personam, at least insofar as the
corporation's activities in the state if the corporation carries on continuous proceedings sought to enforce causes of action related to those very activities or to
and systematic corporate activities in that state. other activities within the state

RULING: WHEREFORE, The Court vacated and remanded, holding that it did not
FACTS: violate federal due process for the state either to take or to decline jurisdiction in the
1. Perkins, a non-resident of Ohio, filed 2 actions in personam in the Court of proceeding since the company's continuous and systematic carrying of business
Ohio against Benguet Consolidated Mining. In one action, Perkins seeks made it fair and reasonable to subject the company to the proceedings.
68,400 dollars in dividends claimed to be due to her as a stockholder. She
also claims 2.5M dollars damages largely because of the company’s failure RATIO:
to issue her the certificates for 120k shares of its stock 1. The US SC held that the company’s continuous and systematic in-state
2. The company's mining properties were in the Philippine Islands. Its activities, including director’s meetings, business correspondence, banking
operations there were completely halted during the occupation of the Islands stock transfers, and payment of salaries, were enough to make it fair and
 reasonable to subject the company to proceedings in personam, at least rendering the above decisions this Court was aided, in reaching its conclusion
insofar as the proceedings sought to enforce causes of action related to those as to the limited scope of the statutory authority of the public officials, by this
very activities or to other activities within the state Court's conception that the Due Process Clause of the Fourteenth
2. A more serious question is presented by the claim that the Due Process Clause Amendment precluded a state from giving its public officials authority to
of the Fourteenth Amendment prohibits Ohio from granting such relief accept service in terms broad enough to bind a foreign corporation in
against a foreign corporation. The syllabus in the report of the case below, proceedings against it to enforce an obligation arising outside of the state of
while denying the relief sought, does not indicate whether the Supreme Court the forum. That conception now has been modified by the rationale adopted
of Ohio rested its decision on Ohio law or on the Fourteenth Amendment. in later decisions.
The first paragraph of that syllabus is as follows: 7. Today if an authorized representative of a foreign corporation be physically
present in the state of the forum and be there engaged in activities appropriate
"1. The doing of business in this state by a foreign corporation, which has not appointed a statutory agent to accepting service or receiving notice on its behalf, we recognize that there
upon whom service of process against the corporation can be made in this state or otherwise consented to
is no unfairness in subjecting that corporation to the jurisdiction of the courts
service of summons upon it in actions brought in this state, will not make the corporation subject to
service of summons in an action in personam brought in the courts of this state to enforce a cause of action of that state through such service of process upon that representative. This
not arising in this state and in no way related to the business or activities of the corporation in this state." has been squarely held to be so in a proceeding in personam against such a
155 Ohio St. 116, 117, 98 N.E.2d 33 corporation, at least in relation to a cause of action arising out of the
corporation's activities within the state of the forum.
3. If the above statement stood alone, it might mean that the decision rested 8. The essence of the issue here, at the constitutional level, is a like one of
solely upon the law of Ohio. In support of that possibility we are told that, general fairness to the corporation. Appropriate tests for that are discussed in
under the rules and practice of the Supreme Court of Ohio, only the syllabus International Shoe Co. v. Washington, the amount and kind of activities
necessarily carries the approval of that court. As we understand the Ohio which must be carried on by the foreign corporation in the state of the forum
practice, the syllabus of its Supreme Court constitutes the official opinion of so as to make it reasonable and just to subject the corporation to the
that court but it must be read in the light of the facts and issues of the case. jurisdiction of that state are to be determined in each case. The corporate
4. The only opinion accompanying the syllabus of the court below places the activities of a foreign corporation which, under state statute, make it
concurrence of its author unequivocally upon the ground that the Due Process necessary for it to secure a license and to designate a statutory agent upon
Clause of the Fourteenth Amendment prohibits the Ohio courts from whom process may be served provide a helpful but not a conclusive test. For
exercising jurisdiction over the respondent corporation in this proceeding. example, the state of the forum may by statute require a foreign mining
That opinion is an official part of the report of the case. The report, however, corporation to secure a license in order lawfully to carry on their such
does not disclose to what extent, if any, the other members of the court may functional intrastate operations as those of mining or refining ore. On the
have shared the view expressed in that opinion. Accordingly, for us to allow other hand, if the same corporation carries on, in that state, other continuous
the judgment to stand as it is would risk an affirmance of a decision which and systematic corporate activities as it did here consisting of directors'
might have been decided differently if the court below had felt free, under meetings, business correspondence, banking, stock transfers, payment of
our decisions, to do so. salaries, purchasing of machinery, etc. those activities are enough to make it
5. Unlike the case at bar (155 Ohio St. 116, 117, 98 N.E.2d 33) no actual notice of fair and reasonable to subject that corporation to proceedings in personam in
the proceedings was received in those cases by a responsible that state, at least insofar as the proceedings in personam seek to enforce
representative of the foreign corporation. In each case, the public official causes of action relating to those very activities or to other activities of the
who was served with process in an attempt to bind the foreign corporation corporation within the state.
was held to lack the necessary authority to accept service so as to bind it in a 9. The instant case takes us one step further to a proceeding in personam to
proceeding to enforce a cause of action arising outside of the state of the enforce a cause of action not arising out of the corporation's activities in the
forum. state of the forum. Using the tests mentioned above we find no requirement
6. The necessary result was a finding of inadequate service in each case and a of federal due process that either prohibits Ohio from opening its courts to
conclusion that the foreign corporation was not bound by it. The same would the cause of action here presented or compels Ohio to do so. This conforms
be true today in a like proceeding where the only service had and the only to the realistic reasoning in International Shoe Co. v. Washington:
notice given was that directed to a public official who had no authority, by
statute or otherwise, to accept it in that kind of a proceeding. At the time of
". . . there have been instances in which the continuous corporate operations within a state were
thought so substantial and of such a nature as to justify suit against it on causes of action arising
from dealings entirely distinct from those activities’

10. While no mining properties in Ohio were owned or operated by the

company, many of its wartime activities were directed from Ohio and
were being given the personal attention of its president in that State at
the time he was served with summons. Consideration of the
circumstances which, under the law of Ohio, ultimately will determine
whether the courts of that State will choose to take jurisdiction over the
corporation is reserved for the courts of that State. Without reaching
that issue of state policy, we conclude that, under the circumstances
above recited, it would not violate federal due process for Ohio either to
take or decline jurisdiction of the corporation in this proceeding. This
relieves the Ohio courts of the restriction relied upon in the opinion
accompanying the syllabus below and which may have influenced the
judgment of the court below.
 008 World-Wide Volkswagen Corporation v. Woodson (DAYU) FACTS:
January 21, 1980 | White, J. | Jurisdiction over the Person 1. Harry and Kay Robinson (respondents) purchased a new Audi from Seaway
Volkswagen, Inc. (petitioner), in Massena, N.Y. in 1976. The Robinson
PETITIONER: World Wide Volkswagen Corp., Seaway Volkswagen Inc. Family resided in NY. The following year, they left NY for a new home in
RESPONDENTS: The Honorable Charles Woodson; Key Eloise Robinson; Eva Arizona.
May Robinson; Harry Robinson; George Samuel Robinson 2. As they passed through State of Oklahoma, another car struck their Audi in
the rear, causing a fire, which severely burned Kay Robinson and her 2
SUMMARY: Robinson Family are NY residents. They purchased a car from a children.
Volkswagen retailer in NY. On a drive to Arizona, the Robinson Family got in a 3. The Robinsons then brought a products liability action in the District Court
car accident causing fire while driving through Oklahoma. They claim that a for Creek County, Oklahoma—claimed that injuries resulted from defective
defective placement of gas tank and fuel system caused the accident. Robinson design & placement of Audi’s gas tank and fuel system.
Family sued the retailer (Seaway) and its NY based wholesale distributor (World- 4. They joined as defendants Audi NSU Auto Union Aktiengesellschaft
Wide) in Oklahoma state court. Seaway and World-Wide assert that Oklahoma (Manufacturer), Volkswagen of America, Inc. (Importer), World-Wide
could not properly have jurisdiction over their person. Trial court rejected this Volkswagen Corp. (Regional Distributor), and Seaway (Retail Dealer).
claim. Seaway and World-Wide then sought writ of prohibition from SC of 5. Seaway and World-Wide entered special appearances claiming that
Oklahoma to prevent trial court from exercising in personam jurisdiction. SC of Oklahoma’s exercise of jurisdiction over them would offend the limitations
Oklahoma denied writ because the jurisdiction was authorized by Oklahoma’s of the State jurisdiction imposed by the Due Process Clause of the 14th
long-arm statute, which allows jurisdiction over defendants who caused tortuous Amendment.
injury within the state. The issue is w/n the Oklahoma court may exercise in 6. Facts show that World-Wide is incorporated and has business office in NY.
personam jurisdiction over non-resident defendants—the SC said NO. Petitioners Distributed vehicles, parts, and accessories, under contract with Volkswagen,
carry on no activity whatsoever in Oklahoma. They close no sales and perform no to retail dealers in NY, New Jersey, and Connecticut. Seaway, is incorporated
services there. They avail themselves of none of the privileges and benefits of and has place of business in NY.
Oklahoma law. They solicit no business there either through salepersons or 7. Respondents adduced no evidence that either World-Wide or Seaway does
through advertising reasonably calculated to reach the State. Nor does the record any business in Oklahoma, ships or sells any products to or in that State, has
show that they regularly sell cars at wholesale or retail to Oklahoma customers or an agent to receive process there, or purchases advertisements in any media
residents, or that they indirectly, through others, serve or seek to serve the calculated to reach Oklahoma. à In fact, as respondents’ counsel conceded
Oklahoma market. Seaway’s sales are made in NY. World-Wide’s market is at oral argument, there was no showing that any automobile sold by World-
limited to dealers in NY, New Jersey, and Connecticut. There is no evidence of Wide or Seaway has ever entered Oklahoma, with the single exception of the
vehicle involved in the present case.
record that any automobiles distributed by World-Wide are sold to retail
8. District Court—rejected constitutional claim and denied petitioners’ MR.
customers outside this tristate area.
9. Petitioners then sought writ of prohibition in SC of Oklahoma to restrain
District Judge, respondent Charles Woodson, from exercising in personam
DOCTRINE:
jurisdiction over them. They renewed their contention that, because they had
A state court may exercise personal jurisdiction over a nonresident
defendant only so long as there exist “minimum contacts” between the no “minimal contacts” with the State of Oklahoma, actions of the Distric
defendant and the forum State. Judge were in violation of their rights.
10. SC of Oklahoma denied the writ. Held that personal jurisdiction over
“Foreseeability” alone has never been a sufficient benchmark for personal petitioners was authorized by Oklahoma’s “long-arm statute”
jurisdiction under Due Process Claud. That is not to say that foreseeability is
ISSUE/s:
wholly irrelevant. But the foreseeability that is critical to due process analysis is
1. WoN an Oklahoma court may exercise in personam jurisdiction over a
not the mere likelihood that a product will find its way into the forum State.
nonresident automobile retailer and its wholesale distributor in a products
Rather, it is that the defendant’s conduct and connection with the forum State are
liability action, when the defendants’ only connection with Oklahoma is the
such that he should reasonably anticipate being haled into court there.
fact that an automobile sold in New York to New York residents became
involved in an accident in Oklahoma—NO, we find that petitioners have no
 “contacts, ties, or relations” with the State of Oklahoma. retail to Oklahoma customers or residents, or that they indirectly, through
others, serve or seek to serve the Oklahoma market.
RULING: Judgment of the SC of Oklahoma is reversed. 8. Respondents seek to base jurisdiction on one, isolated occurrence and
whatever inferences can be drawn therefrom: the fortuiotous circumstance
RATIO: that a single Audi, sold in NY to NY residents, happened to suffer an accident
1. Due Process Clause of the 14th Amendment limits the power of a state court while passing through Oklahoma.
to render a valid personal judgment against a nonresident defendant. A 9. It is argued that because an automobile is mobile by its very design and
judgment rendered in violation of due process is void in the rendering State purpose, it was “foreseeable” that the Robinson’ Audi would cause injury in
and is not entitled to full faith and credit elsewhere. Oklahoma. Yet “foreseeability” alone has never been a sufficient benchmark
2. A state court may exercise personal jurisdiction over a nonresident defendant for personal jurisdiction under Due Process Claud.
only so long as there exist “minimum contacts” between the defendant and 10. If foreseeability were the criterion, a local California tire retailer could be
the forum State. forced to defend in Pennsylvania when a blowout occurs there; a Wisconsin
3. The concept of minimum contacts can be seen to perform 2 related but seller of a defective automobile jack could be haled before a distant court for
distinguishable functions: (1) It protects the defendant against the burdens of damage caused in New Jersey; or a Florida soft-drink concessionaire could
litigating in a distant or inconvenient forum; (2) it acts to ensure that the be summoned to Alaska to account for injuries happening there. à what
States, through their courts, do not reach out beyond the limits imposed on would happen then is that his amenability to suit would travel with the chattel.
them by their status as coequal sovereigns in a federal system. 11. That is not to say that foreseeability is wholly irrelevant. But the
4. The defendant’s contacts with the forum State must be such that maintenance foreseeability that is critical to due process analysis is not the mere likelihood
of the suit “does not offend traditional notions of fair play and substantial that a product will find its way into the forum State. Rather, it is that the
justice.” “The relationship between the defendant and the forum must be such defendant’s conduct and connection with the forum State are such that he
that it is ‘reasonable…to require the corporation to defend the particular suit should reasonably anticipate being haled into court there.
which is brought there.’ Implicit in this emphasis on reasonableness is the 12. The Due Process Clause gives a degree of predictability to the legal system
understanding that the burden on the defendant, while always a primary that allows potential defendants to struction their primary conduct with some
concern, will in an appropriate case be considered in light of other relevant minimum assurance as to where that conduct will and will not render them
factors, including the forum State’s interest in adjudicating the dispute; the liable to suit.
plaintiff’s interest in obtaining convenient and effective relief, at least when 13. When a corporation “purposefully avails itself of the privilege of conducting
that interest is not adequately protected by the plaintiff’s power to choose the activities within the forum State” it has clear notice that it is subject to suit
forum; the interstate judicial system’s interest in obtaining the most efficient there and can act to alleviate the risk of litigation by procuring insurance,
resolution of controversies; and the shared interest of the serveral States in passing the expected costs on to customers, or—if the risk too great—
furthering fundamental substantive social policies.” severing its connection with the State.
5. Thus, the Due Process Clause “does not contemplate that a state may make 14. Hence, if the sale of a product of manufacturer/distributor is not simply an
binding a judgment in personam against an individual or corporate defendant isolated occurrence but arises from the efforts of the manufacturer/distributor
with which the state has no contacts, ties, or relations.” à even if the to serve, directly or indirectly, the market for its product in other States, it is
defendant would suffer minimal or no inconvenience from being forced to not unreasonable to subject it to suit in one of those States if its allegedly
litigate before the tribunals of another State; even if the forum State has a defective merchandise has been the source of injury to its owner or others.
strong interest in applying its law to the controversy; even if the forum State 15. The forum State does not exceed its powers under the Due Process Clause if
is the most convenient location for litigation. it asserts personal jurisdiction over a corporation that delivers its products
6. In the case at hand, we find a total absence of those affiliating circumstances into the stream of commerce with the expectation that they will be purchased
that are a necessary predicate to any exercise of state court jurisdiction. by consumers in the forum State.
7. Petitioners carry on no activity whatsoever in Oklahoma. They close no sales 16. But there is no such basis for Oklahoma jurisdiction over World-Wide or
and perform no services there. They avail themselves of none of the Seaway in this case. Seaway’s sales are made in NY. World-Wide’s market
privileges and benefits of Oklahoma law. They solicit no business there either is limited to dealers in NY, New Jersey, and Connecticut. There is no
through salepersons or through advertising reasonably calculated to reach the evidence of record that any automobiles distributed by World-Wide are sold
State. Nor does the record show that they regularly sell cars at wholesale or to retail customers outside this tristate area.
 17. It is foreseeable that the purchasers of automobiles sold by World-Wide and 5. The Court accepts that a State may exercise jurisdiction over a distributor
Seaway may take them to Oklahoma. But the mere “unilateral activity of which “serves” that State “indirectly” by “delivering its products into the
those who claim some relationship with a nonresident defendant cannot stream of commer with the expectation that they will be purchased by
satisfy the requirement of contact with the forum State.” consumers in the forum State.” It is difficult to see why the Constitution
18. In a variant on the previous argument, it is contended that jurisdiction can be should distinguish between a case involving goods which reach a distant State
supported by fact that petitioners earn substantial revenue from goods used through a chain of distribution and a case involving goods which reach the
in Oklahoma. The Oklahoma SC so found, drawing the inference that because same State because a consumer, using them as the dealer knew the customer
1 automobile sold by petitioners had been used in Oklahoma, others might would, took them there.
have been used there also. 6. In each case, the seller purposefully injects the goods into the stream of
19. This argument seems to make the point that the purchase of automobiles in commerce, and those goods predictability are used in the forum State.
NY, from which the petitioners earn substantial revenue, would not occur but
for the fact that the automobiles are capable of use in distant States like Mr. Justice Marshall, dissenting:
Oklahoma. 1. Basis for assertion of jurisdiction is premised on the deliberate and purposeful
20. Respondents observe that the very purpose of an automobile is to travel, and actions of the defendants themselves in choosing to become part of a
that travel of automobiles sold by petitioners is facilitated by an extensive nationwide, global network for marketing and servicing automobiles.
chain of Volkwagen service centers throughout the country, including some 2. Petitioners are sellers of a product whose utility derives from its mobility.
in Oklahoma. 3. The nationwide service network with which they are affiliated was designed
21. However, financial benefits accruing to the defendant from a collateral to facilitate and encourage such travel.
relation to the forum State will not support jurisdiction if they do not stem 4. Petitioners could not know in advance that this particular automobile would
from a constitutionally cognizable contact with that State. be driven to Oklahoma. They must have anticipated, however, that a
22. Whatever marginal revenues petitioners may receive by virtue of the fact that substantial portion of the cars sold would travel out of NY.
their products are capable of use in Oklahoma is far too attenuated a contact 5. I cannot agree that jurisdiction is necessarily lacking if the product enters the
to justify that State’s exercise of in personam jurisdiction over them. State not through the channels of distribution but in the course of its intended
23. Because we find that petitioners have no “contacts, ties, or relations” with the use by the consumer.
State of Oklahoma, the judgment is reversed. 6. A distributor of automobiles to a multistate market and a local automobile
dealer who makes himself part of a nationwide network of dealerships can
Mr. Justice Brennan, dissenting: fairly expect that the cars they sell may cause injury in distant States and that
1. Petitioners are not unconnected with the forum. Although both sell they may be called on to defend a resulting lawsuit there. à it is the “quality
automobiles within limited sales territories, each sold the automobile which and nature” of petitioners’ activity
in fact was driven to Oklahoma, where it was involved in an accident.
2. It may be true that each sincerely intended to limit its commercial impact to Mr. Justice Blackmun, dissenting:
the limited territory, and that each intended to accept the benefits and 1. We are a nation on wheels. What we are concerned with here is the
protection of the laws only of those States within the territory. But obvioulsly automobile and its peripatetic character. Any automobile is likely to wander
these were unrealistic hopes that cannot be treated as an automatic far from its place of licensure or from its place of distribution and retail sale.
constitutional shield. To expect that any new automobile will remain in the vicinity of its retail sale
3. Automobile is not a stationary item. It is intended to be moved around. is to blink at reality. The automobile is intended for distance, as well as for
Someone in the business of selling large numbers of automobiles can hardly transportation within a limited area.
plead ignorance of their mobility or pretend that the automobiles stay put after 2. Therefore, it does not seem unreasonable and unconstitutional to uphold
they are sold. It is not merely that a dealer in automobiles foresees that they Oklahom jurisdiction of NY distributor and dealer when accident happened
will move. à The dealer actually intends that the purchasers will use the in Oklahoma.
automobiles to travel to distant States where the dealer does not directly “do 3. All are in the business of providing vehicles that spread out over the highways
business”. of our several States. It is not too much to anticipate, at the time of distribution
4. Sale of an automobile does purposefully inject the vehicle into the steam of and time of retail sale, that this Audi would be in Oklahoma.
interstate commerce so that it can travel to distant States.
 009 CALDER vs. JONES (Eleazar) company answered the complaint and made no objection to the jurisdiction
March 20, 1984 | Rehnquist, J. | Jurisdiction of the California court.
4. Petitioner South is a reporter employed by the Enquirer. He is a resident of
PETITIONERS: Calder and South (National Enquirer) Florida, though he frequently travels to California on business. South wrote
RESPONDENTS: Shirley Jones the first draft of the challenged article, and his byline appeared on it. He did
most of his research in Florida, relying on phone calls to sources in California
SUMMARY: Petitioners South is a reporter, and Calder is president and an editor, for the information contained in the article.
of National Enquirerm based in Florida. South wrote an article that accused 5. Shortly before publication, South called Jones’ home and read to her husband
Respondent, Jones, of a drinking problem that was so severe that it affected her a draft of the article so as to elicit his comments upon it. Aside from his
acting career. Calder reviewed the article and edited it to its final form for frequent trips and phone calls, South has no other relevant contacts with
publication. Jones brought a suit for libel, and South and Calder challenged California.
California’s personal jurisdiction since neither had any physical contacts with 6. Petitioner Calder is also a Florida resident. He has been to California only
California, particularly as it pertained to this article. South did rely on sources twice: once, on a pleasure trip, prior to the publication of the article and once
from California, and Jones’ life and career were centered in California. The district after to testify in an unrelated trial. Calder is president and editor of the
court cited Petitioner’s rights under the First Amendment to the United States Enquirer. He "oversees just about every function of the Enquirer.".
Constitution as trumpeting Due Process Clause concerns. The appellate court 7. Calder reviewed and approved the initial evaluation of the subject of the
reversed because First Amendment arguments are irrelevant to jurisdictional article and edited it in its final form. He also declined to print a retraction
analysis. The issue in this case is whether California has personal jurisdiction over requested by respondent. Calder has no other relevant contacts with
South and Calder through their targeting of Jones with their article. The US SC California.
said that yes, California had personal jurisdiction over Petitioners. The first step 8. In considering Calder, et. al.'s motion to quash service of process, the
in the analysis is to determine the focal point of the harm suffered, and that was in Superior Court surmised that the actions of petitioners in Florida, causing
California. The Court then determined that Petitioners’ actions intentionally aimed injury to respondent in California, would ordinarily be sufficient to support
at a California resident, and the injuries suffered would be in that state. Calder an assertion of jurisdiction over them in California.
argued that, because they were merely employees of the libelous newspaper, their 9. But the court felt that special solicitude was necessary because of the potential
case was analogous to a welder who works on a boiler in Florida that subsequently "chilling effect" on reporters and editors which would result from requiring
explodes in California. The Court said that this analogy does not hold water and them to appear in remote jurisdictions to answer for the content of articles
distinguishes this by noting that unlike the welder they intentionally targeted the upon which they worked. The court also noted that respondent's rights could
California contact. be "fully satisfied" in her suit against the publisher without requiring
petitioners to appear as parties. The Superior Court, therefore, granted the
DOCTRINE: A state has personal jurisdiction over any party whose actions motion.
intentionally reach another party in the state and are the basis for the cause of 10. The California Court of Appeal reversed. The court agreed that neither
action. petitioner's contacts with California would be sufficient for an assertion of
jurisdiction on a cause of action unrelated to those contacts.
FACTS: 11. But the court concluded that a valid basis for jurisdiction existed on the theory
1. Jones lives and works in California. She and her husband brought this suit that petitioners intended to, and did, cause tortious injury to respondent in
against the National Enquirer, Inc., its local distributing company, and California. The fact that the actions causing the effects in California were
petitioners for libel, invasion of privacy, and intentional infliction of performed outside the State did not prevent the State from asserting
emotional harm. jurisdiction over a cause of action arising out of those effects. The court
2. The Enquirer is a Florida corporation with its principal place of business in rejected the Superior Court's conclusion that First Amendment considerations
Florida. It publishes a national weekly newspaper with a total circulation of must be weighed in the scale against jurisdiction.
over 5 million. About 600,000 of those copies, almost twice the level of the
next highest State, are sold in California. ISSUE/s
3. Jones' and her husband's claims were based on an article that appeared in the WoN California has personal jurisdiction over South and Calder, who are Florida-
Enquirer's October 9, 1979, issue. Both the Enquirer and the distributing based employees, through their targeting of Jones, a California-based actress, with
their article? – YES, because of their intentional conduct in Florida calculated to cause their intentional, and allegedly tortious, actions were expressly aimed at
injury to respondent in California. Thus, California is the focal point both of the story California.
and of the harm suffered. Jurisdiction over petitioners is therefore proper in California 8. Petitioner South wrote and petitioner Calder edited an article that they knew
based on the "effects" of their Florida conduct in California. would have a potentially devastating impact upon respondent. And they knew
that the brunt of that injury would be felt by Jones in the State in which she
RULING: We hold that jurisdiction over petitioners in California is proper because lives and works and in which the National Enquirer has its largest circulation.
of their intentional conduct in Florida calculated to cause injury to respondent in 9. Under the circumstances, petitioners must "reasonably anticipate being haled
California. The judgment of the California Court of Appeal is Affirmed. into court there" to answer for the truth of the statements made in their article.
10. An individual injured in California need not go to Florida to seek redress from
persons who, though remaining in Florida, knowingly cause the injury in
RATIO: California.
1. The Due Process Clause of the Fourteenth Amendment to the United States 11. Calder et al. are correct that their contacts with California are not to be judged
Constitution permits personal jurisdiction over a defendant in any State with according to their employer's activities there. On the other hand, their status
which the defendant has "certain minimum contacts such that the as employees does not somehow insulate them from jurisdiction. Each
maintenance of the suit does not offend 'traditional notions of fair play and defendant's contacts with the forum State must be assessed individually. In
substantial justice.” this case, petitioners are primary participants in an alleged wrongdoing
2. In judging minimum contacts, a court properly focuses on "the relationship intentionally directed at a California resident, and jurisdiction over them is
among the defendant, the forum, and the litigation." proper on that basis.
3. The plaintiff's lack of "contacts" will not defeat otherwise proper jurisdiction, 12. We also reject the suggestion that First Amendment concerns enter into the
but they may be so manifold as to permit jurisdiction when it would not exist jurisdictional analysis. The infusion of such considerations would needlessly
in their absence. Here, Jones is the focus of the activities of Calder et. al. out complicate an already imprecise inquiry.
of which the suit arises. 13. Moreover, the potential chill on protected First Amendment activity
4. The allegedly libelous story concerned the California activities of a California stemming from libel and defamation actions is already taken into account in
resident. It impugned the professionalism of an entertainer whose television the constitutional limitations on the substantive law governing such suits.
career was centered in California. The article was drawn from California 14. To reintroduce those concerns at the jurisdictional stage would be a form of
sources, and the brunt of the harm, in terms both of respondent's emotional double counting. We have already declined in other contexts to grant special
distress and the injury to her professional reputation, was suffered in procedural protections to defendants in libel and defamation actions in
California. In sum, California is the focal point both of the story and of addition to the constitutional protections in the substantive laws.
the harm suffered. Jurisdiction over petitioners is therefore proper in 15. We hold that jurisdiction over petitioners in California is proper because of
California based on the "effects" of their Florida conduct in California. their intentional conduct in Florida calculated to cause injury to respondent
5. Calder et al. argue that they are not responsible for the circulation of the in California.
article in California. A reporter and an editor, they claim, have no direct
economic stake in their employer's sales in a distant State. Nor are ordinary
employees able to control their employer's marketing activity. The mere fact
that they can "foresee" that the article will be circulated and have an effect in
California is not sufficient for an assertion of jurisdiction. They do not "in
effect appoint the agent for service of process."
6. Petitioners liken themselves to a welder employed in Florida who works on
a boiler which subsequently explodes in California. Cases which hold that
jurisdiction will be proper over the manufacturer, should not be applied to the
welder who has no control over and derives no direct benefit from his
employer's sales in that distant State.
7. Petitioners' analogy does not wash. Whatever the status of their hypothetical
welder, petitioners are not charged with mere untargeted negligence. Rather,
 010 PHILSEC INVESTMENT CORP. vs. COURT OF APPEALS therein, or the property of the defendant from any interest therein, or the property of the
G.R. No. 103493 | June 19, 1997 | Mendoza , J. | Jurisdiction over the person defendant has been attached within the Philippines, service may, by leave of court, be
effected out of the Philippines by personal service as under section 7; or by publication
PETITIONERS: PHILSEC INVESTMENT CORPORATION, BPI- in a newspaper of general circulation in such places and for such time as the court may
INTERNATIONAL FINANCE LIMITED, and ATHONA HOLDINGS, N.V.
order, in which case a copy of the summons and order of the court shall be sent by
RESPONDENTS: THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO
DAIC, VENTURA O. DUCAT, PRECIOSO R. PERLAS, and WILLIAM H. CRAIG registered mail to the last known address of the defendant, or in any other manner the
court may deem sufficient. Any order granting such leave shall specify a reasonable time,
SUMMARY: Ducat obtained $2.5M loans from Ayala and PHILSEC. Respondent 1488, which shall not be less than sixty (60) days after notice, within which the defendant must
Inc. assumed Ducat’s obligation under an Agreement, whereby 1488 executed a answer.
Warranty Deed, by which the latter sold a parcel of land to ATHONA for $2.8M [$2.5M
loaned by PHILSEC and Ayala to ATHONA, $300k paid by promissory note (PN)]. PN
became due and demandable and ATHONA failed to pay, thus 1488 sued ATHONA, FACTS:
PHILSEC and Ayala in the US. While the civil case was pending in the US, PHILSEC, 1. On January 15, 1983, Ducat obtained separate loans from Ayala International
Ayala (now BPI-IFL) and ATHONA filed a complaint for sum of money with damages Finance and PHILSEC Investment in the sum of US$2.5M, secured by shares
and writ of preliminary attachment before the RTC of Makati, alleging that private of stock owned by Ducat. In order to facilitate the payment of the loans, 1488,
respondents committed fraud by selling the property at a price 400 times more than its Inc., through its president, Daic, assumed Ducats obligation under an
true value ($800k), thus demanding the excess payment ($1.7M). On April 20, 1987, the Agreement, whereby 1488, Inc. executed a Warranty Deed with Vendors
trial court issued a writ of preliminary attachment against the real and personal properties Lien by which it sold to ATHONA a parcel of land in Texas for US$2.8M,
of private respondents. However, upon motion by the latter, it dismissed the case on the while PHILSEC and AYALA extended a loan to ATHONA in the amount of
ground of litis pendentia and forum non conveniens, and also held that it was without US$2.5M as initial payment of the purchase price. The balance of US$300k
jurisdiction over 1488 and Daic because they were non-residents and the action was not was to be paid by means of a promissory note (PN) executed by ATHONA
an action in rem or quasi in rem, so that extraterritorial service of summons was in favor of 1488, Inc. Subsequently, upon their receipt of the US$2.5M from
ineffective. CA affirmed the ruling. Hence, this case. 1488, Inc., PHILSEC and AYALA released Ducat from his indebtedness and
delivered to 1488, Inc. all the shares of stock in their possession belonging to
The pertinent issue (related to the topic in the syllabus) is whether or not the court Ducat.
acquired jurisdiction over 1488 and Daic (president) through extraterritorial service. 2. As ATHONA failed to pay the interest on the balance of the PN, the entire
amount covered by the note became due and demandable. Accordingly, 1488,
Inc. sued PHILSEC, AYALA, and ATHONA in the US for payment of the
Yes. This is an action in personam and summons was served by extraterritorial
balance and for damages for breach of contract and for fraud allegedly by
service. Rule 14, Sec. 17 (now Sec. 15) on extraterritorial service provides that service misrepresenting the marketability of the shares of stock delivered to 1488,
of summons on a non-resident defendant may be effected out of the Philippines by leave Inc. under the Agreement. (Civil Case No. H-86-440)
of Court where, among others, the property of the defendant has been attached within the 3. While Civil Case No. H-86-440 was pending in the US, PHILSEC, AYALA
Philippines. It is not disputed that the properties, real and personal, of the private (now BPI-IFL) and ATHONA filed a complaint for Sum of Money with
respondents had been attached prior to service of summons under the Order of the trial Damages and Writ of Preliminary Attachment against private respondents in
court dated April 20, 1987. the RTC of Makati, docketed as Civil Case No. 16563. The complaint
alleged that respondents committed fraud by selling the property at a price
400% more than its true value of only US$800k. They claimed that, as a result
DOCTRINES: Rule 14 SEC. 17. Extraterritorial service. - When the defendant does not of the respondents’ fraudulent misrepresentations, ATHONA, PHILSEC, and
reside and is not found in the Philippines and the action affects the personal status of the AYALA were induced to enter into the Agreement and to purchase the
plaintiff or relates to, or the subject of which is, property within the Philippines, in which Houston property. They prayed that respondents be ordered to return to
the defendant has or claims a lien or interest, actual or contingent, or in which the relief ATHONA the excess payment of US$1.7M and to pay damages. On April
demanded consists, wholly or in part, in excluding the defendant from any interest 20, 1987, the trial court issued a writ of preliminary attachment against the
real and personal properties of private respondents.
 4. Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis because they were non-residents and the action was not an action in rem
pendentia, vis-a-vis Civil Action No. H-86-440 pending in the US, (2) forum or quasi in rem, so that extraterritorial service of summons was ineffective.
non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state 4. The trial court subsequently lifted the writ of attachment it had earlier issued
a cause of action. On the other hand, 1488, Inc. and its president Daic filed a against the shares of stocks of 1488, Inc. and Daic.
joint Special Appearance and Qualified Motion to Dismiss (MTD),
contending that the action being in personam, extraterritorial service of CA’s RULING:
summons by publication was ineffectual. 1. The CA affirmed the dismissal of Civil Case No. 16563 against Ducat, 1488,
5. *Note: While the case was pending in the Court of Appeals, the US Court Inc., and Daic on the ground of litis pendentia.
rendered judgment in favor of private respondents. 2. CA also held that Civil Case No. 16563 was an action in personam for the
recovery of a sum of money for alleged tortious acts, so that service of
Ducat’s ARGUMENT: summons by publication did not vest the trial court with jurisdiction over
1. The alleged overpricing of the property prejudiced only ATHONA, as buyer, 1488, Inc. and Drago Daic.
but not PHILSEC and BPI-IFL which were not parties to the sale and whose 3. The dismissal of Civil Case No. 16563 on the ground of forum non
only participation was to extend financial accommodation to ATHONA conveniens was likewise affirmed by the Court of Appeals on the ground that
under a separate loan agreement. the case can be better tried and decided by the U.S. court:

1488(through Daic)’s ARGUMENTS: ISSUES:

1. The service of summons did not vest the court with jurisdiction over 1488, 2. Whether Civil Case No. 16536 is barred by the judgment of the U.S. court.
Inc., which is a non-resident foreign corporation, and Daic, who is a non- Before the SC could bar the case, there must be an opportunity to
resident alien. challenge the foreign decision on grounds allowed under the law.
2. For a foreign judgment to be pleaded as res judicata, a judgment admitting 3. Did the lower court correctly dismiss the case under the principle of forum
the foreign decision is not necessary. non conveniens? Trial court’s dismissal is unjustifiable under the principle
of forum non conveniens
PHILSEC, AYALA & ATHONA’s ARGUMENT: 4. Did the trial court obtain jurisdiction over the person of 1488 and Daic
1. Foreign judgment cannot be given the effect of res judicata without giving through extraterritorial service? Yes, See Rule 14 Section 15
them an opportunity to impeach it on grounds stated in Rule 39, Sec. 50 (now
48) of the Rules of Court10, to wit: want of jurisdiction, want of notice to the RULING: WHEREFORE, the decision of the Court of Appeals is REVERSED and
party, collusion, fraud, or clear mistake of law or fact Civil Case No. 16563 is REMANDED to the Regional Trial Court of Makati for
consolidation with Civil Case No. 92-1070 and for further proceedings in accordance
RTC’s RULING: with this decision.
1. The trial court granted Ducat’s MTD, stating that the evidentiary
requirements of the controversy may be more suitably tried before the forum RATIO:
in the US, under the principle forum non conveniens, even as it noted that First Issue
1. While the Court has given the effect of res judicata to foreign judgments in
Ducat was not a party in the US case.
several cases, it was after the parties opposed to the judgment had been given
2. The trial court also granted the MTD filed by 1488, Inc. on the ground of litis ample opportunity to repel them on grounds allowed under the law. It is not
pendentia. necessary for this purpose to initiate a separate action or proceeding for
3. The trial court also held itself without jurisdiction over 1488, Inc. and Daic enforcement of the foreign judgment. What is essential is that there is

10
Rule 39, SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal of a be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or
foreign country, having jurisdiction to pronounce the judgment is as follows: clear mistake of law or fact.
(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to the ***Note that this case was decided before the effectivity of 1997 Rules of CivPro, hence the slight
thing; difference. This is now Section 48.
(b) In case of a judgment against a person, the judgment is presumptive evidence of a right as
between the parties and their successors in interest by a subsequent title; but the judgment may
 opportunity to challenge the foreign judgment, in order for the court to which does not include forum non conveniens. The propriety of dismissing a
properly determine its efficacy. This is because in this jurisdiction, with case based on this principle requires a factual determination; hence, it is more
respect to actions in personam, as distinguished from actions in rem, a foreign properly considered a matter of defense.
judgment merely constitutes prima facie evidence of the justness of the claim 2. Second, while it is within the discretion of the trial court to abstain from
of a party and, as such, is subject to proof to the contrary. assuming jurisdiction on this ground, it should do so only after vital facts are
2. In the case at bar, it cannot be said that petitioners were given the opportunity established, to determine whether special circumstances require the courts
to challenge the judgment of the U.S. court as basis for declaring it res desistance.
judicata or conclusive of the rights of private respondents. The proceedings 3. In this case, the trial court abstained from taking jurisdiction solely on the
in the trial court were summary. Neither the trial court nor the appellate court basis of the pleadings filed by private respondents in connection with the
was even furnished copies of the pleadings in the U.S. court or apprised of motion to dismiss. It failed to consider that PHILSEC is a domestic
the evidence presented thereat, to assure a proper determination of whether corporation and Ducat is a Filipino, and that it was the extinguishment of the
the issues then being litigated in the U.S. court were exactly the issues raised latter’s debt which was the object of the transaction under litigation. The trial
in this case such that the judgment that might be rendered would court arbitrarily dismissed the case even after finding that Ducat was not a
constitute res judicata. party in the U.S. case.
3. Petitioners in fact questioned the jurisdiction of the U.S. court over their Third Issue (related to syllabus topic)
persons, but their claim was brushed aside by both the trial court and the This is an action in personam and summons was served by extraterritorial
Court of Appeals. service. Rule 14, Sec. 1711 on extraterritorial service provides that service of
4. Moreover, the Court notes that 1488, Inc. and Daic filed a petition for the summons on a non-resident defendant may be effected out of the Philippines by leave
enforcement of judgment in the RTC of Makati, docketed as Civil Case No. of Court where, among others, the property of the defendant has been attached within
92-1070, although the proceedings were suspended because of the pendency the Philippines. It is not disputed that the properties, real and personal, of the private
of this case. To sustain the appellate court’s ruling that the foreign judgment respondents had been attached prior to service of summons under the Order of the trial
constitutes res judicata and is a bar to the claim of petitioners would court dated April 20, 1987
effectively preclude petitioners from repelling the judgment in the case for
enforcement. An absurdity could then arise: a foreign judgment is not subject
to challenge by the plaintiff against whom it is invoked, if it is pleaded to
resist a claim as in this case, but it may be opposed by the defendant if the
foreign judgment is sought to be enforced against him in a separate
proceeding.
5. Accordingly, to insure the orderly administration of justice, this case and
Civil Case No. 92-1070 should be consolidated. After all, the two have been
filed in the RTC of Makati, albeit in different salas. In such proceedings,
petitioners should have the burden of impeaching the foreign judgment and
only in the event they succeed in doing so may they proceed with their action
against private respondents.
Second Issue
1. First, a motion to dismiss is limited to the grounds under Rule 16, Sec. 1,

11
Rule 14, SEC. 17. Extraterritorial service. - When the defendant does not reside and is not found court may order, in which case a copy of the summons and order of the court shall be sent by
in the Philippines and the action affects the personal status of the plaintiff or relates to, or the registered mail to the last known address of the defendant, or in any other manner the court may
subject of which is, property within the Philippines, in which the defendant has or claims a lien or deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not
interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in be less than sixty (60) days after notice, within which the defendant must answer.
excluding the defendant from any interest therein, or the property of the defendant from any **Now Section 15
interest therein, or the property of the defendant has been attached within the Philippines, service
may, by leave of court, be effected out of the Philippines by personal service as under section 7;
or by publication in a newspaper of general circulation in such places and for such time as the
 011 PANTALEON v. ASUNCION (Fordan) FACTS:
May 22, 1959 | Concepcion, J. | Jurisdiction over the Person 1. On June 12, 1953, Vicenta Pantaleon (Pantaleon) instituted this action in the
CFI of Nueva Ecija to recover P2,000, with interest, and attorney's fees from
PLAINTIFF-APPELLEE: Vicenta Pantaleon Honorato Asuncion (Asuncion).
DEFENDANT-APPELLANT: Honorato Asuncion 2. The summons originally issued was returned by the sheriff of Nueva Ecija
unserved claiming that, according to reliable information, Asuncion was
SUMMARY: Pantaleon instituted an action in the CFI of Nueva Ecija against residing in B-24 Tala Estate, Caloocan, Rizal.
Asuncion for the recovery of P2,000, with interest, and attorney’s fees. The summons 3. An alias summons was then issued and served in the place mentioned.
originally issued was returned since Asuncion was residing in B-24 Tala Estate, However, the provincial sheriff of Rizal returned it unserved stating that
Caloocan, Rizal. An alias summons was then issued and served on said place but the Asuncion had left the Tala Estate since Feb. 18, 1952 and that diligent efforts
same was return unserved since Asuncion had already left the said place. On to locate him proved to no avail.
Pantaleon's motion, the CFI ordered that Asuncion be summoned by publication 4. On Pantaleon's motion, the CFI ordered, on Mar. 9, 1955, that Asuncion be
which was then published on Mar. 21 and 28, and Apr. 4, 1955 in the "Examiner", summoned by publication and the summons was published on Mar. 21 and 28,
alleged newspaper of general circulation in Nueva Ecija. Having failed to appear or and Apr. 4, 1955 in the "Examiner", newspaper of general circulation in Nueva
answer the complaint within the period stated in the summons, Asuncion was Ecija.
declared in default on July 12, 1955. Thereafter, on Sept. 8, 1955, the CFI rendered 5. Having failed to appear or answer the complaint within the period stated in the
judgment in favor of Pantaleon. 46 days after, Asuncion filed a petition for relief summons, on July 12, 1955, Asuncion was declared in default.
from order of July 12 and from judgment of Sept. 8, 1955 upon the ground of mistake 6. On Sept. 8, 1955, the CFI rendered judgment for Pantaleon and against
and excusable negligence. The CFI denied Asuncion’s petition for relief. Hence, the Asuncion for P2,300, with interest at the legal rate and costs.
current petition. Asuncion claims that summons by publication had not been made in 7. On Oct. 24, 1955 (46 days after), Asuncion filed a petition for relief from said
conformity with the ROC since the copy of the summons and the order for the order of July 12, 1955 and from said judgment of Sept. 8, 1955 upon the ground
publication were not deposited "in the post office, postage prepaid, directed to the of mistake and excusable negligence. Asuncion stated that:
defendant by ordinary mail to his last known address", in violation of Rule 7, Sec. a. on Sept. 26, 1955, at 34 Pitimine Street, San Francisco del Monte Quezon
21, of ROC. City (his residence), he received notice of a registered letter at the Post
Office in San Jose, Nueva Ecija (his old family residence);
The issue is whether or not the CFI of Nueva Ecija acquired jurisdiction over the b. he proceeded immediately to the latter municipality to claim said letter,
person of Asuncion. NO. Sec. 21, Rule 7 of ROC is unqualified. It prescribes the which he received on Sept. 28, 1955;
"proof of service by publication" regardless of whether the defendant is a resident of c. the letter contained copy of order of July 12, 1955 and the judgment of Sept.
the Philippines or not. Sec. 16 must be read in relation to Sec. 21, which complements 8, 1955, much to his surprise, for he had not been summoned or notified of
it. Thus, the SC conceive of no reason why copy of the summons and of the order for the hearing of this case;
its publication should be mailed to non-resident defendants, but not to resident d. had copy of the summons and of the order for its publication been sent to
defendants. Considering that strict compliance with the terms of the statute is him by mail, as provided in Rule 7, Sec. 21, of the ROC said summons and
necessary to confer jurisdiction through service by publication, the conclusion is order would have reached him; and
inescapable that the CFI had no authority whatsoever to issue the order of July 12, e. his failure to appear before the CFI is excusable being due to the mistake of
declaring Asuncion in default and to render the decision of Sept. 8, 1955, and that the authorities concerned in not complying with the provisions of said
both are null and void ab initio. *doctrine* In other words, summons by publication section.
cannot—consistently with the due process clause in the Bill of Rights— confer upon 8. However, the CFI denied Asuncion’s petition for relief. Hence, the current
the court jurisdiction over said defendant. petition.
9. Asuncion claims that summons by publication had not been made in conformity
DOCTRINE: It is a well-settled principle of Constitutional Law that, in an action with the ROC since the copy of the summons and the order for the publication
strictly in personam, like in this case, personal service of summons, within the forum, were not deposited "in the post office, postage prepaid, directed to the
is essential to the acquisition of jurisdiction over the person of the defendant, who
does not voluntarily submit himself to the authority of the court.
 defendant by ordinary mail to his last known address", in violation of Rule 7, over the person of the defendant, who does not voluntarily submit himself
Sec. 2112, of ROC. to the authority of the court.
10. On the other hand, Pantaleon allege that the provision applicable is not Sec. 21 4. In other words, summons by publication cannot—consistently with the due
but Sec. 1613, Rule 7 of the ROC. Furthermore, the requirement in Sec. 21 of process clause in the Bill of Rights— confer upon the court jurisdiction over
an affidavit showing that the copy of the summons and of the order for its said defendant.
publication had been sent by mail to Asuncion’s last known address refers to "Due process of law requires personal service to support a personal
extraterritorial service of summons provided in Sec. 1714, Rule 7 of ROC. judgment, and, when the proceeding is strictly in personam brought to
determine the personal rights and obligations of the parties, personal service
ISSUES: Whether or not the CFI of Nueva Ecija acquired jurisdiction over the within the state or a voluntary appearance in the case is essential to the
acquisition of jurisdiction so as to constitute compliance with the constitutional
person of Asuncion. – NO, since the service of summons was not done personally
requirement of due process. * * *.
and that requirements for proof of service by publication was also not followed. "Although a state legislature has more control over the form of service on
its own residents than nonresidents, it has been held that in actions in personam
RULING: The order of July 12 and the decision of Sept. 8, 1955 are hereby set aside * * * service by publication on resident defendants, who are personally within
and annulled, and let the record of this case be remanded to the lower court for further the state and can be found therein is not 'due process of law', and a statute
proceedings, with costs against Pantaleon. It is so ordered. allowing it is unconstitutional." (16A C.J.S., pp. 786, 789; Italics ours.)

RATIO: Other issue: Petition for relief should have been granted
1. Sec. 21, Rule 7 of ROC is unqualified. It prescribes the "proof of service by 5. From the viewpoint of substantial justice and equity, the SC is of the opinion
publication" regardless of whether the defendant is a resident of the Philippines that Asuncion's petition for relief should have been granted:
or not. Sec. 16 must be read in relation to Sec. 21, which complements it. Thus, a. First, it was filed well within the periods provided in the ROC.
the SC conceive of no reason why copy of the summons and of the order for its b. Second (this is more important), Asuncion's verified answer, which was
publication should be mailed to non-resident defendants, but not to resident attached to said petition, contains allegations which, if true, constitute a
defendants. The SC cannot even say that Asuncion, who, according to the good defense. Thus, for instance, in paragraph (2) of the "special denials"
return of the Sheriff of Nueva Ecija, was reportedly residing in Rizal—where therein, he alleged:
he, in fact (San Francisco del Monte and Quezon City used to be part of Rizal), "That it is not true that he failed to pay the said indebtedness of his said
was residing—could reasonably be expected to read the summons published in wife, as alleged in par. 3 of the complaint, for as a matter of fact, plaintiff
a newspaper said to be a general circulation in Nueva Ecija. and defendant agreed upon a settlement of the said indebtedness of the
latter's deceased wife on Dec. 5, 1948, whereby defendant was allowed to
2. Considering that strict compliance with the terms of the statute is
pay it out of his monthly salary by instalment of P10 monthly beginning
necessary to confer jurisdiction through service by publication, the Jan. 1949.”
conclusion is inescapable that the CFI had no authority whatsoever to issue 6. The specification of the dates of payment, of the amounts paid each time, of
the order of July 12, 1955, declaring Asuncion in default and to render the the manner in which each payment was made, and of the number of the
decision of Sept. 8, 1955, and that both are null and void ab initio. money orders in which 18 payments had been effected, constitutes a strong
3. Apart from the foregoing, it is a well-settled principle of Constitutional Law indication of the probable veracity of said allegation, fully justifying the grant
that, in an action strictly in personam, like in this case, personal service of of an opportunity to prove the same.
summons, within the forum, is essential to the acquisition of jurisdiction

12 14
Sec. 21, Rule 7 of ROC: "If the service has been made by publication, service may be proved by the Sec. 17, Rule 7 of ROC: "When the defendant does not reside and is not found in the Philippines and the
affidavit of the printer, his foreman or principal clerk, or of the editor, business or advertising manager, to action affects the personal status of the plaintiff or relates to, or the subject of which is, property within the
which affidavit a copy of the publication shall be attached, and by an affidavit showing the deposit of a copy Philippines, in which the defendant has or claims a lien or interest, actual or contingent, or in which the
of the summons and order for publication in the post office, postage prepaid, directed to the defendant by relief demanded consists, wholly or in part, in excluding the defendant from any interest therein, or the
ordinary mail to his last known address." (Italics supplied.) property of the defendant has been attached within the Philippines, service may, by leave of court, be
13
Sec. 16, Rule 7 of ROC: "Whenever the defendant is designated as an unknown owner, or the like, or effected out of the Philippines by personal service as under section 7; or by registered mail; or by publication
whenever the address of a defendant is unknown and cannot be ascertained by diligent inquiry, service may, in such places and for such time as the court may order, in which case a copy of the summons and order of
by leave of court, be effect upon him by publication in such places and for such times as the court may the court shall be sent by ordinary mail to the last known address of the defendant; or in any other manner
order." the court may deem sufficient. Any order granting such leave shall specify a reasonable time, which shall
not be less than sixty (60) days after notice, within which the defendant must answer."
 012 SANTOS v. PNOC (GALINDEZ) FACTS:
September 23, 2008 | Corona, J. | Jurisdiction Over the Person 1. On December 23, 2002, respondent PNOC filed a complaint for sum of
money against petitioner Santos in the RTC. The complaint sought to collect
the amount of P698,502.10 representing Santos’ unpaid balance of the car
PETITIONER: Pedro T. Santos
loan advanced to him by PNOC when he was still a member of its BOD.
RESPONDENTS: PNOC Exploration Corporation
2. Personal service of summons to Santos failed because he couldn’t be located
in his last known address despite earnest efforts. Then, on PNOC’s motion,
SUMMARY: PNOC filed a complaint for sum of money, seeking to collect
the RTC allowed service of summons by publication.
P698,502.10 representing Santos’ unpaid balance may be applied only in the
3. PNOC caused the publication of the summons in Remate, a newspaper of
absence of rules of procedure, never in contravention thereof. Personal service of
general circulation in the PH on May 20, 2003.
summons failed because Santos could not be located. Hence, on PNOC’s motion,
4. Then, PNOC submitted the affidavit of publication of the advertising
the court allowed service of summons by publication.
manager of Remate and an affidavit of service of PNOC’s employee to the
effect that he sent a copy of the summons by registered mail to Santos’ last
PNOC caused the publication of the summons on Remate, a newspaper of general
known address.
circulation, submitted the affidavit of publication of Remate’s advertising
5. Santos failed to file his answer within the prescribed period, hence PNOC
manager and affidavit of service of PNOC’s employee that he sent a copy of the
moved that the case be set for reception of its evidence ex parte. This was
summons by registered mail to Santos’ last known address. Despite these, Santos
granted by the trial court in an order dated September 11, 2003.
failed to file his answer within the prescribed period. PNOC moved that the case
6. PNOC proceeded with the ex parte presentation and formal offer of evidence,
be set for reception of its evidence ex parte with the court granted. The case was
and the case was deemed submitted for decision on October 15, 2003.
submitted for decision.
7. On October 28, 2003, Santos filed an Omnibus MR and to Admit Attached
Answer. He sought reconsideration of the September 11 order alleging that
Santos filed an Omnibus MR and to Admit Attached Answer. He sought
the affidavit of service submitted by PNOC failed to comply with Section 19,
reconsideration of the order of the court alleging the affidavit of service failed ot
Rule 14 of the ROC since it was not executed by the clerk of court.
comply with the rules. He also claimed denial of due process as he was no notified
8. Santos also claimed denial of due process as he was not notified of the
of the order. PNOC opposed and insisted that it complied with the rules on service
September 11, 2003 order. He prayed that PNOC’s evidence ex parte be
by publication. Also, pursuant to the order in question, Santos was already
stricken off the records and his answer be admitted.
deemed in default for failure to file an answer. The lower court denied Santos’
9. PNOC opposed and insisted that it complied with the rules on service by
MR. The CA ruled that the trial court did not err in both orders.
publication. Also, pursuant to the order in question, Santos was already
deemed in default for failure to file an answer.
ISSUE: WON the CA erred in upholding the lower court’s orders (despite the
10. In an order dated February 6, 2004, the lower court denied Santos’ MR and
grounds raised in Fact 12) – NO. Even even assuming that the service of summons
held that the rules did not require the affidavit of complementary service by
was defective, the trial court acquired jurisdiction over the person of petitioner by
registered mail to be executed by the clerk of court. Moreover, the process
his own voluntary appearance in the action against him.
was observed as a copy of the order was actually mailed to Santos’ last known
address.
(Please read the whole digest and not just the summary box to see the grounds
11. Santos assailed both orders of the lower court in the CA via a petition for
used by Santos in his MR, and how the court ruled on each matter)
certiorari, contending such were issued with grave abuse of discretion.
12. The errors he imputed to the lower court:
DOCTRINE: RULE 14, SEC. 20. Voluntary appearance. The defendant’s
a. Taking cognizance of the case despite lack of jurisdiction due to
voluntary appearance in the action shall be equivalent to service of summons. The
improper service of summons
inclusion in a motion to dismiss of other grounds aside from lack of jurisdiction
b. Failing to furnish him with copies of its orders and processes,
over the person of the defendant shall not be deemed a voluntary appearance.
particularly the September 11, 2003 order
(emphasis supplied)
c. Upholding technicality over equity and justice.
13. During the pendency of the action in the CA, the lower court rendered a
decision in the civil case ordering Santos to pay P698,502.10 + legal interests
 and costs of suit. summons by publication is complemented by service of summons by
14. Meanwhile, the CA on September 22, 2005 rendered a decision sustaining registered mail to the defendants last known address. This complementary
both orders of the lower court. It also denied Santos’ reconsideration. service is evidenced by an affidavit showing the deposit of a copy of the
summons and order for publication in the post office, postage prepaid,
ISSUE/s: directed to the defendant by registered mail to his last known address.
1. WoN the CA erred in upholding the lower court’s orders (despite the grounds 8. The rules do not require that the affidavit of complementary service be
raised in Fact 12) – NO. Even even assuming that the service of summons executed by the clerk of court. While the trial court ordinarily does the
was defective, the trial court acquired jurisdiction over the person of mailing of copies of its orders and processes, the duty to make the
petitioner by his own voluntary appearance in the action against him complementary service by registered mail is imposed on the party who resorts
to service by publication.
RULING: WHEREFORE, the petition is hereby DENIED. 9. Moreover, even assuming that the service of summons was defective, the
trial court acquired jurisdiction over the person of petitioner by his own
RATIO: voluntary appearance in the action against him.
PROPRIETY OF SERVICE BY PUBLICATION (IMPORTANT) 10. Sec. 20, Rule 14 states:
1. Sec. 14, Rule 14 provides: a. SEC. 20. Voluntary appearance. The defendant’s voluntary
a. SEC. 14. Service upon defendant whose identity or whereabouts are appearance in the action shall be equivalent to service of summons.
unknown. In any action where the defendant is designated as an The inclusion in a motion to dismiss of other grounds aside from
unknown owner, or the like, or whenever his whereabouts are lack of jurisdiction over the person of the defendant shall not be
unknown and cannot be ascertained by diligent inquiry, service may, deemed a voluntary appearance. (emphasis supplied)
by leave of court, be effected upon him by publication in a 11. Santos voluntarily appeared in the action when he filed the Omnibus Motion
newspaper of general circulation and in such places and for such for Reconsideration and to Admit Attached Answer. This was equivalent to
times as the court may order. (emphasis supplied) service of summons and vested the trial court with jurisdiction over the
2. Since Santos could not be personally served with summons as his person of petitioner.
whereabouts were unknown, PNOC was granted leave of court to effect
service of summons upon him by publication in a newspaper of general ENTITLEMENT TO NOTICE OF PROCEEDINGS
circulation. Hence, Santos was properly served summons by publication 12. The trial court allowed PNOC to present evidence ex parte since Santos failed
3. Santos invokes the distinction between actions in rem and in personam, and to file his answer on time. Santos assails this action on the part of the trial
claims that substituted service may be availed of only in an action in rem. court as well as it’s failure to furnish him with copies of orders and processes
4. Santos is wrong. The in rem/in personam distinction was significant under issued in the course of the proceedings.
the old rule because it was silent as to the kind of action to which the rule was 13. Effects of a defendant’s failure to file an answer (as seen in Rule 9 of the
applicable. Because of this silence, the Court limited the application of the ROC):
old rule to in rem actions only. a. SEC. 3. Default; declaration of. If the defending party fails to answer
5. This has been changed. The present rule expressly states that it applies [i]n within the time allowed therefor, the court shall, upon motion of the
any action where the defendant is designated as an unknown owner, or the claiming party with notice to the defending party, and proof of such
like, or whenever his whereabouts are unknown and cannot be ascertained by failure, declare the defending party in default. Thereupon, the court
diligent inquiry. Thus, it now applies to any action, whether in personam, in shall proceed to render judgment granting the claimant such relief
rem or quasi in rem. as his pleading may warrant, unless the court in its discretion
6. Regarding the affidavit of service, Sec. 19 of Rule 14 simply states: requires the claimant to submit evidence. Such reception of evidence
a. An affidavit showing the deposit of a copy of the summons and may be delegated to the clerk of court.
order for publication in the post office, postage prepaid, directed to b. SEC. 4. Effect of order of default. A party in default shall be entitled
the defendant by registered mail to his last known address. to notice of subsequent proceedings but not to take part in the trial.
7. Service of summons by publication is proved by the affidavit of the printer, (emphasis supplied)
his foreman or principal clerk, or of the editor, business or advertising 14. If a defendant failes to file his answer on time, he may be declared in default
manager of the newspaper which published the summons. The service of upon plaintiff’s motion with notice to said defendant.
 15. In this case, even Santos does not dispute that he failed to file his answer on
time. That was in fact why he had to file an Omnibus Motion for
Reconsideration and to Admit Attached Answer.
16. But PNOC moved only for the ex parte presentation of evidence, not for the
declaration of Santos in default.
17. The September 11, 2003 order did not limit itself to permitting respondent to
present its evidence ex parte but in effect issued an order of default. But the
trial court could not validly do that as an order of default can be made only
upon motion of the claiming party. Since no motion to declare petitioner in
default was filed, no default order should have been issued.
18. If a party declared in default is entitled to notice of subsequent proceedings,
all the more should a party who has not been declared in default be entitled
to such notice.
19. But what happens if the residence or whereabouts of the defending party is
not known or he cannot be located? In such a case, there is obviously no way
notice can be sent to him and the notice requirement cannot apply to him. The
law does not require that the impossible be done. Laws and rules must be
interpreted in a way that they are in accordance with logic, common sense,
reason and practicality.
20. Hence, even if Santos was not validly declared in default, he could not
reasonably demand that copies of orders and processes be furnished him. Be
that as it may, a copy of the September 11, 2003 order was nonetheless still
mailed to Santos at his last known address but it was unclaimed.

CORRECTNESS OF NON-ADMISSION OF ANSWER

21. Santos failed to file his answer on time. Considering that the answer was
belatedly filed, the trial court did not abuse its discretion in denying its
admission.
22. Equity is available only in the absence of law, not as its replacement. Equity
may be applied only in the absence of rules of procedure, never in
contravention thereof.
013 EL BLANCO ESPAÑOL-FILIPINO v. PALANCA (Gonzales) made in due form in a newspaper of the city of Manila. At the same time that
March 26, 1918 | Street, J. | Jurisdiction over the res the order of the court was entered directing that publication should be made
in a newspaper, the court further directed that the clerk of the court should
PETITIONER: El Blanco Español-Filipino deposit in the post office in a stamped envelope a copy of the summons and
RESPONDENT: Vicente Palanca, administrator of the estate of Engracio Palanca complaint directed to the defendant at his last place of residence, to wit, the
Tanquinyeng city of Amoy, in the Empire of China. This order was made pursuant to the
following provision in section 399 of the Code of Civil Procedure:
SUMMARY: Engracio obtained a loan from El Banco and mortgaged his property a. "In case of publication, where the residence of a nonresident or
in Manila. He returned to China without paying the debt. El Banco then instituted an absent defendant is known, the judge must direct a copy of the
action to foreclose the mortgage. The notice was sent by publication in the summons and complaint to be forwith deposited by the clerk in the
newspaper and by sending copy of the summons to Engracio’s last known residence post-office, postage prepaid, directed to the person to be served, at
in China. Eventually the property was foreclosed with the bank as the highest bidder. his place of residence."
Seven years after the confirmation of the sale, Palanca, the administrator of the estate 3. Whether the clerk complied with this order does not affirmatively appear.
of Engracio, filed a motion seeking to set aside the order of default and judgment There is, however, among the papers, an affidavit, signed by Bernardo Chan
because jurisdiction over the defendant or over the subject of the action was not y Garcia, an employee of the attorneys for the bank, showing that upon that
acquired. The issues are (1) WoN the court acquired jurisdiction – YES. Foreclosure date he had deposited in Manila post-office a registered letter, addressed to
proceeding is quasi-in rem. Jurisdiction over the person is not acquired and is Engracio Palanca Tanquinyeng, at Manila, containing copies of the
nonessential. (2) WoN the proceedings were conducted in such manner as to complaint, the bank’s affidavit, the summons, and the order of the court
constitute due process of law – YES. The failure of the clerk to mail the notice, if in directing publication. It appears from the postmaster's receipt that Bernardo
fact he did so fail in his duty, is not such as irregularity as amounts to a denial of due probably used an enveloped obtained from the clerk's office, as the receipt
process of law purports to show that the letter emanated from said office.
4. The cause proceeded in usual course in the Court of First Instance; and the
DOCTRINE: Propositions relative to the foreclosure proceeding against the defendant not having appeared, judgment was taken against him by default.
property of a nonresident mortgagor who fails to come in and submit himself In the decision in favor of the bank, it was recited that publication had been
personally to the jurisdiction of the court: (1) That the jurisdiction of the court is properly made in a periodical, but nothing was said about notice having been
derived from the power which it possesses over the property; (II) that jurisdiction given by mail. The court found that the indebtedness amounted to
over the person is not acquired and is nonessential; (III) that the relief granted by the P249,355.32, with interest. Accordingly it was ordered that the defendant
court must be limited to such as can be enforced against the property itself. should deliver said amount to the clerk to be applied to the satisfaction of the
judgment, and in case of his failure, the mortgage property located in the city
of Manila should be exposed to public sale. The payment was never made;
FACTS:
and the court ordered the sale of the property. The sale took place and the
1. This action was instituted by "El Banco Español-Filipino" (bank) to foreclose
property was brought in by the bank for the sum of P110,200. This sale was
a mortgage upon various parcels of real property situated in the city of
confirmed by the court.
Manila. The mortgage was executed by Engracio Palanca Tanquinyeng y
5. About seven years after the confirmation of this sale, a motion was made by
Limquingco (defendant), as security for a debt owing to him to the bank. It
Vicente Palanca, as administrator of the estate of the defendant wherein the
appears that the parties to this mortgage at that time estimated the value of
applicant requested the court to set aside the order of default and the judgment
the property in question at P292,558, which was about P75,000 in excess of
rendered, and to vacate all the proceedings subsequent thereto. The basis for
the indebtedness. After the execution of this instrument by the mortgagor, he
this application was that the order of default and the judgment rendered
returned to China, which appears to have been his native country; and he there
thereon were void because the court had never acquired jurisdiction over the
died without again returning to the Philippine Islands.
defendant or over the subject of the action. But the motion was denied.
2. As the defendant was a nonresident at the time of the institution of the present
action, it was necessary for the bank to give notice to the defendant by
ISSUES:
publication pursuant to section 399 of the Code of Civil Procedure. An order
1. WoN the court acquired jurisdiction – YES. The present action is quasi-in
for publication was accordingly obtained from the court, and publication was
rem. Jurisdiction over the person is not acquired and is nonessential.
 2. WoN the proceedings were conducted in such manner as to constitute due designated. The judgment entered in these proceedings is conclusive only
process of law – YES. The failure of the clerk to mail the notice, if in fact he between the parties.
did so fail in his duty, is not such as irregularity as amounts to a denial of due 6. "If the defendant appears, the cause becomes mainly a suit in
process of law personam, with the added incident, that the property attached remains
liable, under the control of the court, to answer to any demand which may be
RULING: Petition denied. established against the defendant by the final judgment of the court. But, if
there is no appearance of the defendant, and no service of process on
RATIO: him, the case becomes, in its essential nature, a proceeding in rem, the
Jurisdiction only effect of which is to subject the property attached to the payment of
1. The case presents several questions of importance. In the first part, we shall, the demand which the court may find to be due to the plaintiff."
assume that the clerk of the court did not obey the order of the court in the 7. We may then, from that has been stated, formulate the following
matter of mailing the papers which he was directed to send to the defendant propositions relative to the foreclosure proceeding against the property
in Amoy; and in this connection we shall consider, first, whether the court of a nonresident mortgagor who fails to come in and submit himself
acquired the necessary jurisdiction to enable it to proceed with the foreclosure personally to the jurisdiction of the court: (1) That the jurisdiction of the
of the mortgage and, secondly, whether those proceedings were conducted in court is derived from the power which it possesses over the property; (II)
such manner as to constitute due process of law. that jurisdiction over the person is not acquired and is nonessential; (III)
2. Jurisdiction over the person is acquired by the voluntary appearance of a party that the relief granted by the court must be limited to such as can be
in court and his submission to its authority, or it is acquired by the coercive enforced against the property itself.
power of legal process exerted over the person. 8. The idea upon which the decision in Pennoyer vs. Neff proceeds is that the
3. Jurisdiction over the property which is subject of litigation may result either process from the tribunals of one State cannot run into other States or
from a seizure of the property under legal process, whereby it is brought into countries and that due process of law requires that the defendant shall be
the actual custody of the law, or it may result from the institution of legal brought under the power of the court by service of process within the State,
proceedings wherein, under special provisions of law, the power of the court or by his voluntary appearance, in order to authorize to court to pass upon the
over the property is recognized and made effective. In the latter case the question of his personal liability. This doctrine is binding upon the courts of
property, though at all times within the potential power of the court, may the Philippine Islands. In an action to foreclose a mortgage against a
never be taken into actual custody at all. An illustration of the jurisdiction nonresident, upon whom service has been effected exclusively by
acquired by the actual seizure is found in attachment proceedings, where the publication, no personal judgment for the deficiency can be entered.
property is seized at the beginning of the action, or some subsequent stage of 9. It is suggested in the brief of the appellant that the judgment entered in the
its progress, and held to abide the final event of the litigation. An illustration court below offends against the principle just stated and that this judgment is
of what we term potential jurisdiction over the res, is found in the proceeding void because the court in fact entered a personal judgment against the absent
to register the title of land under our system for the registration of land. Here debtor for the full amount of the indebtedness secured by the mortgage. We
the court, without taking actual physical control over the property assumes, do not so interpret the judgment.
at the instance of some person claiming to be owner, to exercise a 10. In a foreclosure proceeding against a nonresident owner it is necessary for
jurisdiction in rem over the property and to adjudicate the title in favor of the the court to ascertain the amount due and to make an order requiring for the
petitioner against all the world. payment. In the present case the judgment which was entered contains the
4. In the terminology of American law the action to foreclose a mortgage is said following words: "Because it is declared that the said defendant Engracio
to be a proceeding quasi in rem. Palanca Tanquinyeng y Limquingco, is indebted in the amount P249,355.32,
5. The action quasi in rem differs from the true action in rem in the plus the interest, to the 'Banco Español-Filipino' . . . before said defendant is
circumstance that in the former an individual is named as defendant, and the ordered to deliver the above amount etc., etc."
purpose of the proceeding is to subject his interest therein to the obligation or 11. This is not the language of a personal judgment. Instead it is clearly intended
lien burdening the property. All proceedings having for their sole object the merely as compliance with the requirement that the amount due shall be
sale or other disposition of the property of the defendant, whether by ascertained and that the defendant shall be required to pay it.
attachment, foreclosure, or other form of remedy, are in general way thus 12. The conclusion upon this phase is that whatever may be the effect in other
respects of the failure of the clerk of the Court of First Instance to mail the
 proper papers to the defendant in Amoy, China, such irregularity could in no presume that he did have, or soon acquired, information as to the sale of his
wise impair or defeat the jurisdiction of the court, for in our opinion that property. (Laches)
jurisdiction rests upon a basis much more secure than would be supplied by 18. The Code of Civil Procedure, indeed, expressly declares that there is a
any form of notice that could be given to a resident of a foreign country. presumption that things have happened according to the ordinary habits of
life. In view of the well-known skill of postal officials and employees in
making proper delivery of letters defectively addressed, we think the
presumption is clear and strong that this notice reached the defendant, there
Due process being no proof that it was ever returned by the postal officials as undelivered.
13. As applied to a judicial proceeding, the requirement of due process is satisfied And if it was delivered in Manila, instead of being forwarded to Amoy,
if the following conditions are present, namely; (1) There must be a court of China, there is a probability that the recipient was a person sufficiently
tribunal clothed with judicial power to hear and determine the matter before interested in his affairs to send it or communicate its contents to him.
it; (2) jurisdiction must be lawfully acquired over the person of the defendant
or over the property which is the subject of the proceeding; (3) the defendant 19. In the preceding discussion we have assumed that the clerk failed to send the
must be given an opportunity to be heard; and (4) judgment must rendered notice by post as required by the order of the court. We know proceed to
upon lawful hearing. consider whether this is a proper assumption; and the proposition which we
14. The failure of the clerk to mail the notice, if in fact he did so fail in his propose to establish is that there is a legal presumption that the clerk
duty, is not such as irregularity as amounts to a denial of due process of performed his duty as the ministerial officer of the court, which presumption
law; and hence in our opinion that irregularity, if proved, would not avoid is not overcome by any other facts appearing in the cause.
the judgment in this case. Notice was given by publication in a newspaper 20. In subsection 14 of section 334 of the Code of Civil Procedure it is declared
and this is the only form of notice which the law unconditionally requires. that there is presumption "that official duty has been regularly performed;"
15. In the progress of this discussion we have stated the two conclusions; (1) that and in subsection 18 it is declared that there is a presumption "that the
the failure of the clerk to send the notice to the defendant by mail did not ordinary course of business has been followed." There is therefore clearly a
destroy the jurisdiction of the court and (2) that such irregularity did not legal presumption that the clerk performed his duty about mailing this notice;
infringe the requirement of due process of law. and we think that strong considerations of policy require that this
16. From this point of view, however, it is obvious that any motion to vacate the presumption should be allowed to operate with full force under the
judgment on the ground of the irregularity in question must fail unless it circumstances of this case.
shows that the defendant was prejudiced by that irregularity. The least, 21. That the clerk of the attorneys for the plaintiff erroneously sent a notification
therefore, that can be required of the proponent of such a motion is to show to the defendant at a mistaken address affords in our opinion very slight basis
that he had a good defense against the action to foreclose the mortgage. for supposing that the clerk may not have sent notice to right address.
Nothing of the kind is, however, shown either in the motion or in the affidavit
which accompanies the motion. Malcolm, J., dissenting:
17. It is stated in the affidavit that the defendant died on January 29, 1910. The 1. Where as in the instant case the defendant received no notice and had no
mortgage under which the property was sold was executed far back in 1906; opportunity to be heard, certainly we cannot say that there is due process of
and in the proceedings in the foreclosure were closed by the order of the court law.
confirming the sale dated August 7, 1908. It passes the rational bounds of
human credulity to suppose that a man who had placed a mortgage upon
property worth nearly P300,000 and had then gone away from the scene of
his life activities to end his days in the city of Amoy, China, should have long
remained in ignorance of the fact that the mortgage had been foreclosed and
the property sold, even supposing that he had no knowledge of those
proceedings while they were being conducted. It is more in keeping with the
ordinary course of things that he should have acquired information as to what
was transpiring in his affairs at Manila; and upon the basis of this rational
assumption we are authorized, in the absence of proof to the contrary, to
 014 Perkins v. Dizon (Gustilo) (Benguet) for dividends amounting to P71,379.90 on 52,874 shares of stock
November 16, 1939| Moran, J. | Jurisdiction Over the Res registered in his name, payment of which was being withheld by the
company; and, for the recognition of his right to the control and disposal of
PETITIONER: Idonah Slade Perkins said shares, to the exclusion of all others.
RESPONDENTS: Arsenio Dizon, Judge First Instance of Manila, Eugene Perkins & Benguet 2. To the complaint, the company filed its answer alleging, by way of defense,
Consolidated Mining Company that the withholding of such dividends and the non-recognition of E. Perkin’s
SUMMARY: E. Perkins instituted an action in the CFI of Manila against Benguet Consolidated right to the disposal and control of the shares were due to certain demands
Mining Company (Benguet) for dividends amounting to P71,379.90 on 52,874 shares of stock made with respect to said shares by Idonah Slade Perkins (I.Perkins), and by
registered in his name, payment of which was being withheld by the company; and, for the
one George H. Engelhard (Engelhard).
recognition of his right to the control and disposal of said shares, to the exclusion of all others.
To the complaint, the company filed its answer alleging, by way of defense, that the withholding 3. The answer prays that the adverse claimants be made parties to the action and
of such dividends and the non-recognition of E. Perkin’s right to the disposal and control of the served with notice thereof by publication, and that thereafter all such parties
shares were due to certain demands made with respect to said shares by Idonah Slade Perkins be required to interplead and settle the rights among themselves. On
(I.Perkins), and by one George H. Engelhard (Engelhard). The answer prays that the adverse September 5, 1938, the trial court ordered E. Perkins to include in his
claimants be made parties to the action and served with notice thereof by publication, and that complaint as parties I. Perkins, and Engelhard. The complaint was
thereafter all such parties be required to interplead and settle the rights among themselves. The
trial court ordered E. Perkins to include in his complaint as parties I. Perkins, and Engelhard
accordingly amended and in addition to the relief prayed for in the original
and the complaint was accordingly amended. Thereafter, summons by publication were served complaint, E. Perkins prayed that I. Perkins and Engelhard be adjudged
upon the non-resident defendants, I. Perkins and Engelhard, pursuant to the order of the trial without interest in the shares of stock in question and excluded from any
court. I. Perkins, through counsel, filed her pleading entitled "objection to venue, motion to claim they assert thereon.
quash, and demurrer to jurisdiction" wherein she challenged the jurisdiction of the lower court 4. Thereafter, summons by publication were served upon the non-resident
over her person. The issue is WoN the CFI of Manila has acquired jurisdiction over the person defendants, I. Perkins and Engelhard, pursuant to the order of the trial court.
of I. Perkins as a non-resident defendant, or, notwithstanding the want of such jurisdiction,
whether or not said court may validly try the case?-Yes. On December 9, 1938, Engelhard filed his answer to the amended complaint,
The Court held that when the action relates to property located in the Philippines, the Philippine and on December 10, 1938, I. Perkins, through counsel, filed her pleading
courts may validly try the case, upon the principle that a "State, through its tribunals, may entitled "objection to venue, motion to quash, and demurrer to jurisdiction"
subject property situated within its limits owned by non-residents to the payment of the demand wherein she challenged the jurisdiction of the lower court over her person.
of its own citizens against them; and the exercise of this jurisdiction in no respect infringes upon 5. I. Perkins’ objection, motion and demurrer having been overruled as well as
the sovereignty of the State where the owners are domiciled. In the instant case, there can be no
her motion for reconsideration of the order of denial, she now brought the
question that the action brought by E. Perkins in his amended complaint against I. Perkins, seeks
to exclude her from any interest in a property located in the Philippines. That property consists present petition for certiorari, praying that the summons by publication issued
in certain shares of stocks of the Benguet Consolidated Mining Company, organized in the against her be declared null and void, and that, with respect to her, Judge
Philippines under the provisions of the Spanish Code of Commerce, with its principal office in Arsenio Dizon (Judge Dizon) be permanently prohibited from taking any
the City of Manila and which conducts its mining activities therein. action on the case.
DOCTRINE: The general rule, therefore, is that a suit against a non-resident cannot be ISSUE/s:
entertained by a Philippine court. Where, however, the action is in rem or quasi in rem in
connection with property located in the Philippines, the court acquires jurisdiction over the res,
1. WoN the CFI of Manila has acquired jurisdiction over the person of I. Perkins
and its jurisdiction over the person of the non-resident is non-essential. In order that the court as a non-resident defendant, or, notwithstanding the want of such jurisdiction,
may exercise power over the res, it is not necessary that the court should take actual custody of whether or not said court may validly try the case?- Yes because the action is
the property, potential custody thereof being sufficient. There is potential custody when, from quasi in rem
the nature of the action brought, the power of the court over the property is impliedly recognized
by law. "An illustration of what we term potential jurisdiction over the res, is found in the
RULING: Wherefore, for all the foregoing, petition is hereby denied, with costs
proceeding to register the title of land under our system for the registration of land. Here the
court, without taking actual physical control over the property, assumes, at the instance of some against petitioner.
person claiming to be owner, to exercise a jurisdiction in rem over the property and to adjudicate
the title in favor of the petitioner against all the world." RATIO:
1. Section 398 of our Code of Civil Procedure provides that when a non-resident
FACTS: defendant is sued in the Philippine courts and it appears, by the complaint or
1. On July 6, 1938, Eugene Arthur Perkins (E.Perkins), instituted an action in by affidavits, that the action relates to real or personal property within the
the CFI of Manila against the Benguet Consolidated Mining Company Philippines in which said defendant has or claims a lien or interest, actual or
 contingent, or in which the relief demanded consists, wholly or in part, in domiciled. Every State owes protection to its citizens; and, when non-
excluding such person from any interest therein, service of summons maybe residents deal with them, it is a legitimate and just exercise of authority to
made by publication. hold and appropriate any property owned by such non-residents to satisfy the
2. In El Banco Espanol Filipino v Palanca, the Court explained that (a) In order claims of its citizens. It is in virtue of the State's jurisdiction over the property
that the court may validly try a case, it must have jurisdiction over the subject- of the non-resident situated within its limits that its tribunals can inquire into
matter and over the persons of the parties. Jurisdiction over the subject-matter the non-resident's obligations to its own citizens, and the inquiry can then be
is acquired by concession of the sovereign authority which organizes a court carried only to the extent necessary to control the disposition of the property.
and determines the nature and extent of its powers in general and thus fixes 6. In the instant case, there can be no question that the action brought by
its jurisdiction with reference to actions which it may entertain and the relief E. Perkins in his amended complaint against I. Perkins, seeks to exclude
it may grant. Jurisdiction over the persons of the parties is acquired by their her from any interest in a property located in the Philippines. That
voluntary appearance in court and their submission to its authority, or by the property consists in certain shares of stocks of the Benguet Consolidated
coercive power of legal process exerted over their persons (b) When the Mining Company, organized in the Philippines under the provisions of
defendant is a non-resident and refuses to appear voluntary, the court cannot the Spanish Code of Commerce, with its principal office in the City of
acquire jurisdiction over his person even if the summons be served by Manila and which conducts its mining activities therein. The situs of the
publication, for he is beyond the reach of judicial process. No tribunal shares is in the jurisdiction where the corporation is created, whether the
established by one State can extend its process beyond its territory so as to certificated evidencing the ownership of those shares are within or without
subject to its decisions either persons or property located in another State. that jurisdiction.
3. The general rule, therefore, is that a suit against a non-resident cannot 7. The action being in quasi in rem, The CFI of Manila has jurisdiction over
be entertained by a Philippine court. Where, however, the action is in the person of the non-resident. In order to satisfy the constitutional
rem or quasi in rem in connection with property located in the requirement of due process, summons has been served upon her by
Philippines, the court acquires jurisdiction over the res, and its publication. There is no question as to the adequacy of publication made
jurisdiction over the person of the non-resident is non-essential. In order nor as to the mailing of the order of publication to the petitioner's last
that the court may exercise power over the res, it is not necessary that known place of residence in the United States. But, of course, the action
the court should take actual custody of the property, potential custody being quasi in rem and notice having be made by publication, the relief
thereof being sufficient. There is potential custody when, from the nature that may be granted by the Philippine court must be confined to the res,
of the action brought, the power of the court over the property is it having no jurisdiction to render a personal judgment against the non-
impliedly recognized by law. "An illustration of what we term potential resident.
jurisdiction over the res, is found in the proceeding to register the title of 8. I.Perkins contends that the proceeding instituted against her is one of
land under our system for the registration of land. Here the court, interpleading and is therefore an action in personam. Section 120 of our Code
without taking actual physical control over the property, assumes, at the of Civil Procedure provides that whenever conflicting claims are or may be
instance of some person claiming to be owner, to exercise a jurisdiction made upon a person for or relating to personal property, or the performance
in rem over the property and to adjudicate the title in favor of the of an obligation or any portion thereof, so that he may be made subject to
petitioner against all the world." several actions by different persons, such person may bring an action against
4. The reason for the rule that Philippine courts cannot acquire jurisdiction over the conflicting claimants, disclaiming personal interest in the controversy,
the person of a non-resident, as laid down by the Supreme Court of the United and the court may order them to interplead with one another and litigate their
States in Pennoyer v. Neff, supra, may be found in a recognized principle of several claims among themselves, there upon proceed to determine their
public law to the effect that "no State can exercise direct jurisdiction and several claims. Here, The Benguet Consolidated Mining Company, in its
authority over persons or property without its territory. answer to the complaint filed by E. Perkins, averred that in connection with
5. When, however, the action relates to property located in the Philippines, the shares of stock in question, conflicting claims were being made upon it
the Philippine courts may validly try the case, upon the principle that a by E.Perkins, his wife I. Perkins, and Engelhard, and prayed that these last
"State, through its tribunals, may subject property situated within its two be made parties to the action and served with summons by publication,
limits owned by non-residents to the payment of the demand of its own so that the three claimants may litigate their conflicting claims and settle their
citizens against them; and the exercise of this jurisdiction in no respect rights among themselves.
infringes upon the sovereignty of the State where the owners are 9. The court has not issued an order compelling the conflicting claimants to
 interplead with one another and litigate their several claims among
themselves, but instead ordered the plaintiff to amend his complaint including
the other two claimants as parties defendant. The plaintiff did so, praying
that the new defendants thus joined be excluded from any interest in the
shares in question, and it is upon this amended complaint that the court
ordered the service of the summons by publication. It is therefore, clear
that the publication of the summons was ordered not in virtue of an
interpleading, but upon the filing of the amended complaint wherein an
action quasi in rem is alleged.
10. Had not the complaint been amended, including the herein petitioner as an
additional defendant, and had the court, upon the filing of the answer of the
Benguet Consolidated Mining Company, issued an order under section 120
of the Code of Civil Procedure, calling the conflicting claimants into court
and compelling them to interplead with one another, such order could not
perhaps have validly been served by publication or otherwise, upon the non-
resident Idonah Slade Perkins, for then the proceeding would be purely one
of interpleading. Such proceeding is a personal action, for it merely seeks to
call conflicting claimants into court so that they may interplead and litigate
their several claims among themselves, and no specific relief is prayed for
against them. Suffice it to say that here the service of the summons by
publication was ordered by the lower court by virtue of an action quasi in rem
against the non-resident defendant.
11. I. Perkins claims that the lower court had no jurisdiction over her person not
only because she is a non-resident, but also because the court had no
jurisdiction over the subject-matter of the action and that the issues therein
involved have already been decided by the New York court and are being
relitigated in the California court. Although this argument is obviously
erroneous, as neither jurisdiction over the subject-matter nor res adjudicata
nor lis pendens has anything to do with the question of jurisdiction over her
person, we believe and so hold that I. Perkins has not, by such erroneous
argument, submitted herself to the jurisdiction of the court. Voluntary
appearance cannot be implied from either a mistaken or superflous reasoning
but from the nature of the relief prayed for.
 015 Travelers Health Assn. v. Virginia (Hilario) suit does not offend 'traditional notions of fair play and substantial justice.'"
June 5, 1950 | Black, J. | Jurisdiction over the Res
The contacts and ties of Travelers with Virginia residents, together with
that state's interest in faithful observance of the certificate obligations,
PETITIONER: Travelers Health Association, R.E. Prat treasurer of Travelers justify subjecting Travelers to cease and desist proceedings under § 6 of
Health, sued in his personal capacity.
the Blue Skies Act. Travelers did not engage in mere isolated or short-
RESPONDENTS: Virginia
lived transactions. Its insurance certificates, systematically and
SUMMARY: Travelers Health Association is a non-profit membership widely delivered in Virginia following solicitation based on
association which conducts a mail order health insurance business. It is based in recommendations of Virginians, create continuing obligations
Nebraska. It has no agents, and instead gains members through the unpaid between the Association and each of the many certificate holders in
activities of those already members, who are encouraged to recommend the the state. Its clients caused claims for losses to be investigated, and the
Association to friends and submit their names to the home office. Meanwhile, in Virginia courts were available to them in seeking to enforce obligations
the separate state of Virginia, the Blue Sky Law was passed to protect insurance created by the group of certificates.
clients from fraud. The Blue Sky Law requires those selling or offering such
DOCTRINE: A state has a legitimate interest in all insurance policies
securities to obtain a permit from the State Corporation Commission. § 6 of the
protecting its residents against risks, an interest which the state can protect
Blue Sky Law authorizes the State Corporation Commission to issue a cease even though the state action may have repercussions beyond state lines.
and desist order restraining violations of the Act. The section also provides
for service by registered mail where other types of service are unavailable

"because the offering is by advertisement and/or solicitation through FACTS:
periodicals, mail, telephone, telegraph, radio, or other means of 1. Travelers Health Association (Travelers) was incorporated in Nebraska as a
communication from beyond the limits of the State. Pursuant to this, the non-profit membership association in 1904.
State Corporation Commission of Virginia instituted proceedings against 2. Its only office has been located in Omaha, from which it has conducted a mail
Travelers (which is, as you would recall, a NEBRASKA corporation) in order health insurance business. New members pay an initiation fee and
Virginia (which is a separate state and is not Nebraska). This was affirmed obligate themselves to pay periodic assessments at the Omaha office.
3. Travelers does not have any agents. It gains members through the unpaid
and upheld as valid by the Virginia Court of Appeals. Travelers is not
activities of those already members, who are encouraged to recommend the
questioning the validity of the law, but the authority of the State of Virginia Association to friends and submit their names to the home office. Pratt
to reach them, all the way in Nebraska, in cease and desist proceedings (treasurer of Travelers) mails solicitations to prospective clients, and its
since all their activities take place in Nebraska anyway. clients keep referring Travelers to their friends to sort of create a chain of
connections.
WoN the State of Virginia has jurisdiction over the activities of Travelers 4. In an effort to protect its citizens from "unfairness, imposition and fraud" in
Health Association, which was incorporated in Nebraska and conducts its sales of certificates of insurance and other forms of securities, the Virginia
activities in Nebraska – YES, because a state has a legitimate interest "Blue Sky Law" requires those selling or offering such securities to obtain a
permit from the State Corporation Commission.
in all insurance policies protecting its residents against risks, an
5. While violation of the Act is a criminal offense, § 6 of the Blue Sky Law
interest which the state can protect even though the "state action provides another method for enforcement. After notice and a hearing "on the
may have repercussions beyond state lines. merits," the State Corporation Commission is authorized to issue a cease and
desist order restraining violations of the Act. The section also provides for
"Due process requires only that, in order to subject a defendant to a service by registered mail where other types of service are unavailable
judgment in personam, if he be not present within the territory of the forum, "because the offering is by advertisement and/or solicitation through
he have certain minimum contacts with it such that the maintenance of the periodicals, mail, telephone, telegraph, radio, or other means of
communication from beyond the limits of the State. . . ."
 6. Pursuant to this, the State Corporation Commission of Virginia instituted present within the territory of the forum, he have certain minimum
cease and desist proceedings against Travelers (which is, as you would recall, contacts with it such that the maintenance of the suit does not offend
a NEBRASKA corporation) in Virginia (which is a separate state and is not 'traditional notions of fair play and substantial justice.'"
Nebraska). a. the contacts and ties of Travelers with Virginia residents,
7. Having received notice by registered mail only, they appeared "specially" for together with that state's interest in faithful observance of the
"the sole purpose of objecting to the alleged jurisdiction of the Virginia and certificate obligations, justify subjecting Travelers to cease and
of its State Corporation Commission, and of moving to set aside and quash desist proceedings under § 6 of the Blue Skies Act.
service of summons." b. Travelers did not engage in mere isolated or short-lived
8. The Commission, holding that the foregoing facts supported the state's power transactions.
to act in § 6 proceedings, overruled Travelers' objection to jurisdiction and c. Its insurance certificates, systematically and widely delivered in
their motion to quash service. The Association and its treasurer were ordered Virginia following solicitation based on recommendations of
to cease and desist from further solicitations or sales of certificates to Virginia Virginians, create continuing obligations between the
residents "through medium of any advertisement from within or from without Association and each of the many certificate holders in the state.
the state, and/or through the mails or otherwise, by intra- or interstate Travelers have caused claims for losses to be investigated, and
communication unless and until" it obtained authority in accordance with the the Virginia courts were available to them in seeking to enforce
"Blue Sky Law." This order was affirmed by the Virginia Court of Appeals. obligations created by the group of certificates.
9. Travelers and Pratts are not questioning the validity of the law, but the 4. Even assuming Virginia had no power to order Travelers to cease and desist,
authority of the State of Virginia to reach them in cease and desist it would be so disadvantageous for Travelers clients based in Virginia to bring
proceedings since all their activities take place in Nebraska, a totally claims all the way in Nebraska; it would be too costly.
separate state. 5. In addition, suits on alleged losses can be more conveniently tried in Virginia,
a. Travelers raises their right to due process saying their activities are where witnesses would most likely live and where claims for losses would
outside the jurisdiction of Virginia. presumably be investigated. Such factors have been given great weight in
applying the doctrine of forum non conveniens.
ISSUE/s:
1. WoN the State of Virginia has jurisdiction over the activities of Travelers
Health Association, which was incorporated in Nebraska and conducts its
activities in Nebraska – YES, because a state has a legitimate interest in
all insurance policies protecting its residents against risks, an interest
which the state can protect even though the "state action may have
repercussions beyond state lines.

RULING: Affirmed.

RATIO:
1. In this case, Traveler’s business activities reach out beyond one state and
create continuing relationships and obligations with citizens of another state,
so courts need not resort to a fictional "consent" in order to sustain the
jurisdiction of regulatory agencies in the latter state.
2. A state has a legitimate interest in all insurance policies protecting its
residents against risks, an interest which the state can protect even though
the "state action may have repercussions beyond state lines.
3. International Shoe Co. v. Washington: "Due process requires only that,
in order to subject a defendant to a judgment in personam, if he be not
 001 FRENCH VS BANCO NACIONAL DE CUBA (HIRANG) one country will not sit in judgment on the acts of the government of another done
15 October 1968 |Fuld, J. | Act of State within its own territory. Redress of grievances by reason of such acts must be obtained
through the means open to be availed of by sovereign powers as between themselves.
PETITIONER: HAZEL W. FRENCH
FACTS:
RESPONDENTS: BANCO NACIONAL DE CUBA (BANK) 11. The case stems from a regulation of the Cuban Government — adopted after
Fidel Castro's accession to power in January of 1959 — which, in effect,
SUMMARY: Alexander Ritter is an American Citizen who is now living in Florida prevented American and other foreign investors from receiving
but resided in Cuba during the event which led to this lawsuit. When he was in Cuba, currency other than Cuban pesos on their Cuban investments
he invested $350k in a Cuban farm. During this time, foreign investors could receive 12. The investor here involved was Alexander Ritter, an American citizen, now
the proceed in a currency other thean Cuban Pesos. Moreover, such proceeds were living in Florida, who resided in Cuba at the time of the events from which
exempted from Cuban Tax on exportation of Money. Ritter received eight (8) tax this lawsuit arises.
exemption certificates with the aggregate amount of $150k. However, the Cuban 13. Two years before the events in question, he invested about $350,000 in a
Government, through the Currency Stabilization Fund, adopted Decision No. 346 Cuban farm. At that time, the Cuban Government permitted foreign investors
The Cuban Government adopted such Decision in order to protect and preserve to turn the proceeds from their enterprises into American dollars, or other
Cuba's dollar reserves. It Aimed to stop the flow of foreign currency from Cuba and foreign currency, and exempted such proceeds from Cuba's tax on the
as a result the Decision suspended "for the time being the processing of" tax exportation of money
exemption certificates "until reorganization of the system of exemptions. Ritter 14. Under the Currency Stabilization Fund of the Cuban Government it issued
tendered the certificates however, payment in in American dollars was refused under certificates of tax exemption." In June 1959, six months after the
the mandate of the Decision. Hazel French, the assignee of Ritter, brought this present inception of the Castro regime, Ritter acquired eight such certificates,
action before the SC of New York County and obtained a judgment against the aggregating $150,000.
BANK in the amount of $150,000, with interest. The BANK argues that that the 15. However, the Cuban Government, through the Currency Stabilization Fund,
Decision in question "had the force of law" and was an act of the sovereign issued "Decision No. 346." The Cuban Government adopted such Decision
Government of Cuba to which our (US) courts will not deny legal effect. French in order to protect and preserve Cuba's dollar reserves. It Aimed to stop the
avers that the Decision cannot be considered as an act of state since it did not flow of foreign currency from Cuba and as a result the Decision suspended
conform to Cuba's fundamental law and that it had not been published in the "for the time being the processing of" tax exemption certificates "until
"Official Gazette.The issue in this case is WoN the BANK may invoke the "act of reorganization of the system of exemptions"
state" doctrine and the court ruled in the affirmative stating that *[insert 16. In December of 1959, Ritter tendered his certificates for redemption, together
doctrine] Such is not limited to situations in which "the foreign act is committed in with the appropriate number of pesos but the payment in American dollars
a manner `colorably valid' under foreign law. It should make no difference whether was refused under the mandate of the Decision.
the foreign act is, under local law, partially or wholly, technically or
17. Hazel French, the assignee of Ritter, brought the present action before
fundamentally, illegal. So long as the act is the act of the foreign sovereign, it
the Supreme Court of New York County and obtained a judgment
matters not how grossly the sovereign has transgressed its own laws." In order
for In order for the Decision to NOT be considered as an act of state, French must against the BANK in the amount of $150,000, with interest
show that the Cuban authorities themselves would deem Decision No. 346 invalid 18. The BANK argues that that the Decision in question "had the force of
and would disregard it, but she failed to do so. Moreover, the Hickenlooper law" and was an act of the sovereign Government of Cuba to which our
Amendment [see ratio 5 - 8 and footnote] would not apply in this case as a (US) courts will not deny legal effect
defense against the act of state doctrine as what happened did not involve taking 19. French on the other, argues that the Decision cannot be considered as an
or expropriation of the property of Ritter or his assignee, French. act of state since it did not conform to Cuba's fundamental law and that
it had not been published in the "Official Gazette.
DOCTRINE: The courts in the United States will not inquire into the validity of the
acts of a foreign government done within its own territory. Every sovereign State is ISSUE/s:
bound to respect the independence of every other sovereign State, and the courts of WoN the BANK may invoke the "act of state" doctrine. – YES. It has
long been settled, and recently reaffirmed by the Supreme Court in Banco
 Nacional de Cuba v. Sabbatino that the courts in the United States will not exception against the act of state doctrine. It can be invoked in case the
inquire into the validity of the acts of a foreign government done within its situation involves an act of ‘taking’ or ‘expropriation’ from the State]
own territory. 29. [ANSWER OF THE COURT WITH REGARD TO THE
HICKENLOOPER AMENDMENT]: In the present case, although there
RULING: The order of the Appellate Division should be reversed, with costs, and are circumstances which undoubtedly imposed serious losses upon French,
the complaint dismissed. manifestly, they do not reach the level of an outright "taking" or
"expropriation" with which the court was confronted in Sabbatino
RATIO: 30. The Government of Cuba, by its Decision No. 346, has actually done nothing
24. It has long been settled, and recently reaffirmed by the Supreme Court more than enact an exchange control regulation similar to regulations enacted
in Banco Nacional de Cuba v. Sabbatino that the courts in the United States or promulgated by many other countries, including the US. A currency
will not inquire into the validity of the acts of a foreign government done regulation which alters either the value or character of the money to be
within its own territory paid in satisfaction of contracts is not a "confiscation" or "taking
25. Such is not limited to situations in which "the foreign act is committed in a 31. Ritter's loss is due not to a taking of property but, rather, to the breach
manner `colorably valid' under foreign law. It should make no difference of a promise upon which he had relied. What had happened — and
whether the foreign act is, under local law, partially or wholly, undoubtedly to Ritter's financial loss — was that the Cuban law which
technically or fundamentally, illegal. So long as the act is the act of the governed the contract had been changed by the adoption of a government
foreign sovereign, it matters not how grossly the sovereign has regulation which "suspended," perhaps permanently, the conversion of pesos
transgressed its own laws." into dollars. In the strictest sense, and within the terms of the statute we
26. Regardless of whether or not Decision No. 346 was published in the Official are construing, just as no one has "taken" the pesos from Ritter, so no
Gazette or otherwise complied with internal Cuban standards of regularity, it one has "taken" the contract from him; it is still his or French to enforce,
was issued by the Currency Stabilization Fund, an official instrumentality of or attempt to enforce, as the present action bears witness. No other party
the Cuban Government. Moreover, in compliance with that Decision — or claims to be possessed of the contract rights that Ritter had acquired. It
even if only in purported compliance — Banco Nacional, also an agency of is not as though the Cuban Government had assumed title to a contract
the Cuban Government, refused and continues to refuse to exchange pesos right or other chose in action that had belonged to Ritter and had then
for dollars as the certificates had required sought to enforce it against the obligor.
27. French adduced evidence to show that the Decision does not conform to
the fundamental law of Cuba and that it had not been published in the J. Keating (Dissent)
"Official Gazette but such is insufficient. In order for the Decision to NOT 1. The evidence does not establish that Decision No. 346 was applicable to
be considered as an act of state, French must show that the Cuban French’s certificates because of their unique character. But even if these
authorities themselves would deem Decision No. 346 invalid and would certificates were within the ambit of Decision No. 346, it seems
disregard it, but she failed to do so. unalterably established that the act of state defense is inapplicable
28. The Court then proceeded to discuss whether the Hickenlooper because what is involved here is no mere "breach of contract", but a
Amendment would apply in this case as to bar the defense of act of state confiscation clothed in the disguise of a valid currency regulation.
doctrine. [Note: The Hickenlooper Amendment15 is one of the statutory

15
"Notwithstanding any other provision of law, no court in the United States shall this subparagraph shall not be applicable (1) in any case in which an act of a
decline on the ground of the federal act of state doctrine to make a determination on foreign state is not contrary to international law or (2) in any case with respect
the merits giving effect to the principles of international law in a case in which a to which the President determines that application of the act of state doctrine is
claim of title or other right to property is asserted by any party including a foreign required in that particular case by the foreign policy interests of the United
state ( or a party claiming through such state) based upon ( or traced through) a States and a suggestion to this effect is filed on his behalf in that case with the
confiscation or other taking after January 1, 1959, by an act of that state in court." (Emphasis supplied.)
violation of the principles of international law including the principles of
compensation and the other standards set out in this subsection: Provided, That
2. The majority argues that "In the strictest sense, and within the terms of the
[Hickenlooper Amendment], just as no one has `taken' the pesos from Ritter,
so no one has `taken' the contract from him" (p. 59). If the majority means
that the pesos or the certificates have not been physically taken from Ritter's
possession, no one will dispute this. Since when, however, must there be a
physical taking for there to be a "confiscation"? Likewise the majority's
argument that a breach of contract by a foreign state cannot constitute
a confiscation is surely incorrect
3. There is sufficient authority in international law for the proposition that
a taking of property can occur without first depriving the owner of legal
title if the foreigner is effectively deprived of all benefit of the property
4. Moreover, simply because Decision No. 346 was initially necessitated by
Cuba's need to protect its foreign exchange, it does not follow that it remains
valid under international law permanently
5. Under the guise of what the majority chooses to call a currency regulation,
there has been an expropriation here, and no amount of discussion concerning
the currency problems of the postwar world can make it otherwise. This is
no devaluation or temporary suspension. Eight years of no payments and
no substitute arrangements for making adequate compensation is a
sufficient period in which to establish an unlawful taking. Plaintiff's
claim here to the property that she has attached has now become a claim
"based upon a confiscation or other taking which is a violation of
principles of international law"
 02 In Re: PNB vs. US District Court for the District of Hawaii (Kat) class of plaintiffs against the Marcos estate for Human Rights violations by
Feb 4, 2005 | Canby, Circuit Judge | Act of State doctrine the Marcos Regime. The judgment included an injunction restraining the
estate from transferring any estate’s assets. On the other hand, the Republic
PETITIONER: Philippine National Bank of the Philippines sought to forfeit the Marcos estate’s assets on the ground
RESPONDENTS: United States District Court for the District of Hawaii, that they were stolen by Marcos from the Phil. Gov’t and its people.
Respondent, Maximo Hilao;  Estate of Ferdinand Marcos;  Imelda R. Marcos; 20. There was an earlier case (Credit Suisse vs Cent. Dist. of California) wherein
 Ferdinand R. Marcos, Jr., Real Parties in Interest.
the Swiss Asset of Marcos estate had been frozen by the Swiss Gov’t at
SUMMARY: There are 2 parties in this case, the class plaintiffs for Marcos’ the request of the Republic of the Philippines. The class plaintiffs
human rights violations and the Republic of the Philippines for the forfeiture of obtained an injunction from the district court of California requiring the
Marcos’ estate’s assets. There was an earlier case, where the RP requested for Swiss banks to hold the assets for the benefit of the class plaintiffs. The
Marcos’ Swiss assets to be frozen by its govt. The Class plaintiffs obtained an US Court of Appeals issued a writ of mandamus and held that the
injunction from the district court of California requiring the Swiss banks to hold injunction violated the act of state doctrine, which precludes American
the assets for the benefit of the class plaintiffs. The US Court of Appeals held that courts from declaring “invalid” a foreign sovereign's official act – in this
it violated the act of state doctrine. The Swiss government then released the frozen
case the freeze order of the Swiss government.
funds to PNB in escrow. PNB deposited the funds in Singapore and PH SC held
that the assets were forfeited to RP. USDC of Hawaii then ruled that PH SC 21. Thereafter, the Swiss government released the funds frozen in Switzerland
violated due process and ordered reinstatement of an earlier settlement for transfer to the Philippine National Bank in escrow pending a
agreement. Eventually, PNB filed for mandamus with US CA, seeking to restrain determination of proper disposal by a competent court in the Philippines. The
USDC from enforcing its order to show cause. The issue is WoN USDC of Hawaii Philippine National Bank deposited the funds in Singapore. The Philippine
violated the act of state doctrine – YES. Every sovereign state is bound to respect Supreme Court subsequently held that the assets were forfeited to the
the independence of every other sovereign state, and the courts of one country Republic of the Philippines.
will not sit in judgment on the acts of the government of another, done within its
22. The USDC of Hawaii then made a ruling that the Philippine SC had
own territory. In order to obtain assets from the Philippine National Bank, or
to hold the Bank in contempt for the transfer of those assets to the Republic violated “due process by any standard” and the latters judgment was
of the Philippines, the District Court necessarily and expressly held invalid entitled to no deference. It ordered reinstatement of an earlier settlement
the forfeiture judgment of the Philippine Supreme Court. The act of the agreement in the District Court wherein the RP refused to approve and
Philippine Supreme Court was not wholly external, however. Its judgment, consent to it.
which the district court declared invalid, was issued in the Philippines and 23. The District Court then issued an “Order to Show Cause” against the
much of its force upon the Philippine National Bank arose from the fact that
Philippine National Bank, which was not a party to the litigation in the district
the Bank is a Philippine corporation.
court, requiring the Bank to show why it should not be held in contempt for
DOCTRINE: The Act of State doctrine precludes courts from declaring “invalid violating the court’s injunction against transfer of assets by the estate.
a foreign sovereign’s official act.Although the act of state doctrine is normally 24. The Philippine National Bank then filed the present petition for
inapplicable to court judgments arising from private litigation, there is no mandamus in the U.S. 9th Circuit Court of Appeals, seeking to restrain
inflexible rule preventing a judgment sought by a foreign government from the District Court from enforcing its “Order to Show Cause” and from
qualifying as an act of state. pursuing discovery against the Bank officer.
25. The Bank asserted that it had transferred nearly all of the funds in issue to the
Republic of the Philippines pursuant to the judgment of the Philippine
FACTS:
Supreme Court. It contended that the entire proceeding against it for its
18. There are 2 parties in this case, which sought the estate of Marcos. One is the
transfer of funds to the Republic of the Philippines violated the “act of state”
Class Plaintiffs and the other is the Republic of the Philippines (RP).
doctrine.
19. The U.S. District Court (USDC) in Hawaii rendered judgment in favor of the
 National Bank arose from the fact that the Bank is a Philippine
ISSUE/s: corporation.
1. WoN USDC of Hawaii violated the “Act of State” doctrine – YES, every 14. Because the RP’s “interest in the enforcement of its laws does not end at its
sovereign state is bound to respect the independence of every other sovereign borders,” the fact that the escrow funds were deposited in Singapore does not
state preclude the application of the act of state doctrine.
2. WoN the Act of State doctrine does not apply to judicial decisions - NO, there
is no inflexible rule that prevents a judgment to qualify as an act of state
3. WoN the Act of State doctrine was inapplicable because the judgment of the
Philippine Supreme Court did not concern matters within its own territory -
NO, it affects PNB which is a PH corp

RULING: WRIT OF MANDAMUS ISSUED.

RATIO:
First Issue
8. Every sovereign state is bound to respect the independence of every other
sovereign state, and the courts of one country will not sit in judgment on the
acts of the government of another, done within its own territory.
9. Redress of grievances by reason of such acts must be obtained through the
means open to the availed of by sovereign powers as between themselves.
10. The District Court’s orders in issue violated this principle. In order to
obtain assets from the Philippine National Bank, or to hold the Bank in
contempt for the transfer of those assets to the Republic of the
Philippines, the District Court necessarily and expressly held invalid the
forfeiture judgment of the Philippine Supreme Court.

Second Issue
11. Although the act of state doctrine is normally inapplicable to court judgments
arising from private litigation, there is no inflexible rule preventing a
judgment sought by a foreign government from qualifying as an act of state.

Third Issue
12. The USCA held that, “generally, the act of state doctrine applies to official
acts of foreign sovereigns “performed within their own territory.” (Credit
Suisse Case).
13. The act of the Philippine Supreme Court was not wholly external,
however. Its judgment, which the district court declared invalid, was
issued in the Philippines and much of its force upon the Philippine
 003 REPUBLIC vs. MARCOS (LAGUILLES) 4. The Republic alleges that the acts were repeated, forming a pattern of
Dec. 1, 1988 |Noonan, Circuit Judge | Act of State Doctrine predicate acts under RICO. Contrary to the contention of the Marcoses, the
Republic as a governmental body is a person within the meaning of 18 USC
Sec. 1961 (3). The foreign nature of the Republic does not deprive it of
PETITIONER: Republic of the Philippines
statutory personhood.
RESPONDENTS: Ferdinand Marcos, Imelda Marcos
ISSUE/s:
1. WoN the act of state doctrine is applicable in this case – NO, because the
SUMMARY: The Republic of the Philippines brought a civil suit against the
Marcoses did not present evidence to prove that their acts were acts of state,
Marcoses under the RICO. The district court entered a preliminary injunction
and that when a ruler’s former domain has turned against him and seeks the
enjoining the Marcoses from disposing of any of their assets. The Marcoses
recovery of what it claims he has stolen, the act of state doctrine has little or
appealed. The Republic alleges that the Marcoses engaged in fraud and
no applicability.
transportation of stolen property in the US. The Marcoses now invoke the act of
state doctrine.
RULING: Judgment affirmed.
The issue is WoN the act of state doctrine is applicable in this case.
RATIO:
1. The Republic alleges that the Marcoses engaged in mail fraud, wire fraud,
The Court held in the negative. The Marcoses maintain, first, that their acts are
and the transportation of stolen property in the foreign or interstate commerce
insulated because they were acts of state not reviewable by the court. The purpose
of the US. The acts alleged are crimes under 18 USC Sec. 1341 and 2315.
of the acts of state doctrine is to keep the judiciary from embroiling the courts and
2. The Republic alleges that the acts were repeated, forming a pattern of
the country in the affairs of the foreign nation whose acts are challenged. The
predicate acts under RICO. Contrary to the contention of the Marcoses, the
classification keeps a court from making pronouncements on matters over which
Republic as a governmental body is a person within the meaning of 18 USC
it has no power. A court that passes on the validity of an act of state intrudes into
Sec. 1961 (3). The foreign nature of the Republic does not deprive it of
the domain of the political branches. The act of state is not a promise to the ruler
statutory personhood.
of any foreign country that his conduct, if challenged by his own country after his
3. Contrary to the contention of the Marcoses, the complaint sufficiently alleges
fall, may not become the subject of scrutiny in this court. In the instant case, the
a RICO offense. The Republic alleges that the Marcoses and the other
Marcoses offered no evidence to support the classification of their acts as acts of
defendants arranged for the investment in real estate in Beverly Hills of $4
state.
million fraudulently obtained by the Marcoses; that the Marcoses arranged
for the creation of two bank accounts in the name of Imelda at Lloyds Bank
DOCTRINE: The purpose of the acts of state doctrine is to keep the judiciary
of California; that the Marcoses transported in Hawaii money, jewels, and
from embroiling the courts and the country in the affairs of the foreign nation
other property fraudulently obtained by them.
whose acts are challenged.
4. Criminal conduct under RICO forms a pattern if it embraces criminal acts
that have the same or similar purpose, results, participants, victims, or
methods of commission.
FACTS: 5. The purposes of the acts here alleged are the same – to invest and to conceal
1. The Republic of the Philippines brought a civil suit against former president fraudulently-obtained booty. The results are the same – the investment of the
Ferdinand Marcos and his wife Imelda, asserting claims under the Racketeer booty. The principals are the same – the Marcoses. The victim is the same –
Influenced and Corrupt Organizations Act (RICO). the Republic. The episodes are not isolated events. They represent a plan and
2. The district court entered a preliminary injunction enjoining the Marcoses a practice of getting the fruits of fraud out of the Philippines and into the
from disposing of any of their assets except for the payment of attorney’s fees assumed safety of the US.
and normal living expenses. The Marcoses appealed. The Court reversed, and 6. The gravamen of the Republic’s entire case is the allegation that the Marcoses
took the case en banc and now affirm the district court. stole public money. This common allegation supports not only plaintiff’s
3. The Republic alleges that the Marcoses engaged in mail fraud, wire fraud, RICO claims but also the eight claims for conversion, fraud and deceit,
and the transportation of stolen property in the foreign or interstate commerce constructive fraud, constructive trust, breach of implied contract.
of the US. The acts alleged are crimes under 18 USC Sec. 1341 and 2315. 7. The Republic’s strategy of bringing suit in a number of other
 jurisdictions is not decisive of the question whether the claims are such many deeds of a dictator in power, at least when it is apparent that sustaining
that they would ordinarily be tried in one judicial proceeding. such challenge would bring our country into a hostile confrontation with the
8. The present location of the funds in banks in various countries is not dictator.
determinative as to the underlying wrongs alleged in the complaint. The 19. A fortiori, when a ruler’s former domain has turned against him and
complaint brought in this suit would ordinarily be tried in a single case. seeks the recovery of what it claims he has stolen, the act of state doctrine
9. The district court was correct in asserting pendent jurisdiction over these has little or no applicability. The doctrine is meant to facilitate the
claims, as they derive from a “common nucleus of operative fact” in one foreign relations of the US, not to furnish the equivalent of sovereign
judicial proceeding. The power of a federal court to decide pendent claims is immunity to a deposed leader.
wide-ranging. The exercise of the power is discretionary but ordinarily if it 20. In the instant case, the Marcoses offered no evidence to support the
exists is exercised. classification of their acts as acts of state.
10. The common nucleus of operative facts that binds the RICO and non- 21. The act of state doctrine has no bearing on this case. As the doctrine is a
RICO claims is pleaded in paragraph 12, which is incorporated into each pragmatic one, we cannot exclude the possibility that, at some later point in
claim for relief. To prove the predicates for RICO that allegedly the development of this litigation, the Marcoses might produce evidence that
occurred in the US, the Republic will have to prove theft, acceptance of would warrant its application. On the present record, the defense does not
bribes, extortion, conspiracy, and similar acts in the Marcoses’ conduct apply.
of the government in the Philippines. 22. The Marcoses also maintain that the Republic’s action should have been
11. For example, to prove that stolen money was unlawfully transported in the dismissed, on the ground of forum non conveniens. They point to the foreign
US, the Republic will have to prove theft in the Philippines. character of the plaintiff, the nature of the Republic’s claims, and the fact that
Act of State (related to topic) the court will be called upon to decide questions of Philippine law.
12. Before determining whether issuance of an injunction was appropriate, the 23. The inconvenience of the forum was argued by the Marcoses to the district
Court considers two defenses which, if accepted, would block trial of the court. But the court did not abuse its discretion in refusing to dismiss the
case: the Marcoses maintain, first, that their acts are insulated because they Republic’s action on forum non conveniens grounds before issuing the
were acts of state not reviewable by the courts; and second, that any preliminary injunction.
adjudication of these acts would involve the investigation of political
questions beyond the courts’ competence.
13. The classification of certain acts as acts of state with the consequence
that their validity will be treated as beyond judicial review is a pragmatic
device, not required by the nature of sovereign authority and
inconsistently applied in international law.
14. The purpose of the acts of state doctrine is to keep the judiciary from
embroiling the courts and the country in the affairs of the foreign nation
whose acts are challenged. The classification keeps a court from making
pronouncements on matters over which it has no power.
15. The continuing vitality of this doctrine depends on its capacity to reflect the
proper distribution of functions between the judicial and political branches of
the Government on matters bearing upon foreign relations.
16. A court that passes on the validity of an act of state intrudes into the
domain of the political branches. The act of state is not a promise to the
ruler of any foreign country that his conduct, if challenged by his own country
after his fall, may not become the subject of scrutiny in this court.
17. No estoppel exists insulating a deposed dictator from accounting. No
guarantee has been granted that immunity may be acquired by an ex-president
invoking the magic words “act of state” to cover his or her past performance.
18. The classification might be used to prevent judicial challenge in our courts to
 004 GULF OIL CORPORATION v. GILBERT (Marcos) building to his damage of $41,889.10, destroyed merchandise and fixtures to
March 10, 1947 | Jackson, J. | Forum non conveniens his damage of $3,602.40, caused injury to his business and profits of
$20,038.27, and burned the property of customers in his custody under
PETITIONER: Gulf Oil Corporation warehousing agreements to the extent of $300,000.
RESPONDENTS: Gilbert (the case didn’t state his full name) 22. Gulf Oil, when sued in New York, invoked the doctrine of forum non
conveniens, and claimed that the appropriate place for trial is Virgina, where
SUMMARY: Gilbert, a resident of Lynchburg Virginia, operated a public Gilbert lives, and Gulf Oil does business, where all events in litigation took
warehouse. Gulf Oil Corporation, a corporation qualified to do business in New place, where most of the witnesses reside, and where both state and federal
York and Virginia, said to have caused destruction of Gilbert's public warehouse courts are available to Gilbert, and are able to obtain jurisdiction of itself.
and its contents in Virginia by fire resulting from it's negligence. Gilbert filed an 23. The United States District Court considered that the law of New York as to
action for tort with the Southern District of New York. Gulf Oil, when sued in forum non conveniens applied, and that it required the case to be left to the
New York, invoked the doctrine of forum non conveniens, and claimed that the Virgina courts. It therefore dismissed the case.
appropriate place for trial is Virgina, where Gilbert lives, and Gulf Oil does 24. The Circuit Court of Appeals disagreed and reversed the decision of the
business, where all events in litigation took place, where most of the witnesses District Court.
reside, and where both state and federal courts are available to Gilbert, and are
able to obtain jurisdiction of itself. The United States District Court considered ISSUE/s: WoN the United States District Court has inherent power to dismiss a suit
that the law of New York as to forum non conveniens applied, and that it required pursuant to the doctrine of forum non conveniens. – YES because some of the
the case to be left to the Virgina courts. It therefore dismissed the case. The Circuit important considerations in the application of the doctrine of forum non conveniens,
Court of Appeals disagreed and reversed the decision of the District Court. The from the standpoint of litigants, are relative ease of access to sources of proof,
issue is WoN the United States District Court has inherent power to dismiss a suit availability of compulsory process for attendance of unwilling witnesses, cost of
pursuant to the doctrine of forum non conveniens. – YES because some of the obtaining attendance of willing witnesses, possibility of view of the premises if that
important considerations in the application of the doctrine of forum non be appropriate, and all other practical problems that make trial of a case easy,
conveniens, from the standpoint of litigants, are relative ease of access to sources expeditious, and inexpensive.
of proof, availability of compulsory process for attendance of unwilling witnesses,
cost of obtaining attendance of willing witnesses, possibility of view of the RULING: Reversed.
premises if that be appropriate, and all other practical problems that make trial of
a case easy, expeditious, and inexpensive. To fix the place of trial at a point where RATIO:
litigants cannot compel personal attendance and may be forced to try their cases 32. The venue statutes of the United States permitted Gilbert to commence his
on deposition is to create a condition not satisfactory to court, jury, or most action in the Southern District of New York, and empower that court to
litigants. entertain it. But that does not settle the question whether it must do so. Indeed,
the doctrine of forum non conveniens can never apply if there is absence of
DOCTRINE: The principle of forum non conveniens is simply that a court may jurisdiction or mistake of venue.
resist imposition upon its jurisdiction even when jurisdiction is authorized by the 33. The principle of forum non conveniens is simply that a court may resist
letter of a general venue statute. imposition upon its jurisdiction even when jurisdiction is authorized by
the letter of a general venue statute.
34. These statutes (general venue statute) are drawn with a necessary generality,
FACTS: and usually give a plaintiff a choice of courts, so that he may be quite sure of
20. Gilbert operated a public warehouse. He filed an action for tort with the some place in which to pursue his remedy.
Southern District of New York, but he resides at Lynchburg, Virginia, where 35. But the open door may admit those who seek not simply justice, but perhaps
he operated his warehouse. justice blended with some harassment. A plaintiff sometimes is under
21. He alleges that Gulf Oil Corporation, a corporation qualified to do business temptation to resort to a strategy of forcing the trial at a most inconvenient
in New York and Virginia, is in violation of the ordinances of Lynchburg place for an adversary, even at some inconvenience to himself.
because it carelessly handled a delivery of gasoline to his warehouse tanks 36. Many of the states have met misuse of venue by investing courts with a
and pumps as to cause an explosion and fire which consumed athe warehouse discretion to change the place of trial on various grounds, such as the
 convenience of witnesses and the ends of justice. The federal law contains no with $400,000 transactions is not an assumption we easily make. Nor can we
such express criteria to guide the district court in exercising its power. assume that a jury from Lynchburg and vicinity would be "staggered" by
37. An interest to be considered, and the one likely to be most pressed, is the contemplating the value of a warehouse building that stood in their region, or
private interest of the litigant. of merchandise and fixtures such as were used there, nor are they likely to be
38. Important considerations are the relative ease of access to sources of proof; staggered by the value of chattels which the people of that neighborhood put
availability of compulsory process for attendance of unwilling, and the cost in storage.
of obtaining attendance of willing, witnesses; possibility of view of premises, 47. It is a strange argument on behalf of a Virginia plaintiff (Gilbert) that the
if view would be appropriate to the action, and all other practical problems community which gave him patronage to make his business valuable is not
that make trial of a case easy, expeditious, and inexpensive. capable of furnishing jurors who know the value of the goods they store, the
39. There may also be questions as to the enforceability of a judgment if one is building they are stored in, or the business their patronage creates. And there
obtained. The court will weigh relative advantages and obstacles to fair trial. is no specification of any local influence, other than accurate knowledge of
40. It is often said that the plaintiff may not, by choice of an inconvenient forum, local conditions, that would make a fair trial improbable.
"vex," "harass," or "oppress" the defendant by inflicting upon him expense or 48. Gulf Oil points out that not only Gilbert, but every person who participated
trouble not necessary to his own right to pursue his remedy. But, unless the in the acts charged to be negligent, resides in or near Lynchburg. It also
balance is strongly in favor of the defendant, the plaintiff's choice of forum claims a need to interplead an alleged independent contractor which made the
should rarely be disturbed. delivery of the gasoline and which is a Virginia corporation domiciled in
41. Factors of public interest also have place in applying the doctrine. Lynchburg, that it cannot interplead in New York.
Administrative difficulties follow for courts when litigation is piled up in 49. Certainly to fix the place of trial at a point where litigants cannot compel
congested centers instead of being handled at its origin. personal attendance and may be forced to try their cases on deposition
42. The law of New York as to the discretion of a court to apply the doctrine of is to create a condition not satisfactory to court, jury, or most litigants.
forum non conveniens, and as to the standards that guide discretion is, so far 50. The court likewise could well have concluded that the task of the trial court
as here involved, the same as the federal rule. would be simplified by trial in Virginia.
43. Turning to the question whether this is one of those rather rare cases where 51. If trial was in a state court, it could apply its own law to events occurring
the doctrine should be applied, we look first to the interests of the litigants. there. If in federal court by reason of diversity of citizenship, the court would
44. Gilbert himself is not a resident of New York, nor did any event connected apply the law of its own state in which it is likely to be experienced. The
with the case take place there, nor does any witness with the possible course of adjudication in New York federal court might be beset with conflict
exception of experts live there. No one connected with that side of the case of laws problems all avoided if the case is litigated in Virginia, where it arose.
save counsel for him resides there, and he has candidly told us that he was 52. The District Court did not exceed its powers or the bounds of its discretion in
retained by insurance companies interested presumably because of dismissing Gilbert's complaint and remitting him to the courts of his own
subrogation. His affidavits and argument are devoted to controverting claims community.
as to Gulf Oil's inconvenience, rather than to showing that the present forum
serves any convenience of his own, with one exception
45. The only justification for trial in New York advanced here is one rejected
by the district court and is set forth in the brief as follows:
"This Court can readily realize that an action of this type, involving
as it does a claim for damages in an amount close to $400,000, is
one which may stagger the imagination of a local jury which is
surely unaccustomed to dealing with amounts of such a nature.
Furthermore, removed from Lynchburg, the respondent will
have an opportunity to try this case free from local influences
and preconceived notions which make it difficult to procure a
jury which has no previous knowledge of any of the facts
herein."
46. This unproven premise that jurors of New York live on terms of intimacy
 005 KK SHELL SEKIYU OSAKA HATSUBAISHO V CA parties is still to be established. We leave this matter to the sound discretion of the
(ARMAND) trial court judge who is in the best position, after some vital facts are established, to
July 30, 1990 | Cortes, J. | Jurisdiction v Forum non conveniens determine whether special circumstances require that his court desist from assuming
jurisdiction over the suit.
PETITIONER: KK Shell Sekiyu Osaka Hatsubaisho and Fu Hing Oil
RESPONDENTS: Court of Appeals, Atlantic Venus Co, M/V Estella FACTS:
SUMMARY: 11. On January 7,1987, Kumagai Kaiun Kaisha, Ltd. (hereinafter referred to as
On January 7, 1987, Kumagai Ltd (Japanese Corp) filed a complaint for collection of Kumagai), acorporation formed and existing under the laws of Japan, filed a
a sum of money with preliminary attachment against Atlantic Venus Co (Atlantic) a complaint for the collection of asum of money with preliminary attachment
corporation registered in Panama, the vessel MV Estrella and Crestamonte Shipping against Atlantic Venus Co., S.A. (hereinafter referredto as "Atlantic"), a
Corporation, a Philippine Corporation. Atlantic is the owner of the MV Estrella. The corporation registered in Panama, the vessel MV Estella and
complaint was filed in the RTC of Manila alleging that Crestamonte a bareboat CrestamonteShipping Corporation (hereinafter referred to as
charterer and operator of the MV Estrella, appointes NS Shipping Corp (NSS), a "Crestamonte"), a Philippine corporation.Atlantic is the owner of the MV
Japanese Corporation, as its general agent in Japan. The appointment was formalized Estella. The complaint, docketed as Civil Case No. 8738930 ofthe Regional
in an Agency Agreement. NSS appointed Kumagai as its local agent in Osaka, Japan. Trial Court, Branch XIV, Manila alleged that Crestamonte, as bareboat
Kumagai supplied the MV Estrella with supplies and service but despite repeated chartererand operator of the MV Estella, appointed N.S. Shipping
demands, Crestamonte failed to pay the amount due. NSS and Keihin Narasaki Corp Corporation (hereinafter referred to as"NSS"), a Japanese corporation, as its
(Keihin) filed complaints-in-intervention.On May 19, 1987, Fu Hung Oil (Fu Hing) a general agent in Japan.
corporation organized in Hong Kong and not doing business in the Philippines filed a 12. The appointment was formalized inan Agency Agreement. NSS in turn
motion for leave to interene with an attached complaint-in-intervention alleging that appointed Kumagai as its local agent in Osaka, Japan.Kumagai supplied the
Fu Hing supplied marine diesel oil to the MV Estrella and incurred barge expenses MV Estella with supplies and services but despite repeated
for the sum of $152,412 but such has remained unpaid despite demand and that the demandsCrestamonte failed to pay the amounts due.NSS and Keihin
claim constitutes a maritime lien.On July 16, 1987, KK Shell, a corporation organized Narasaki Corporation (hereinafter referred to a Keihin filed complaints-in-
in Japan and not doing business in the Philippines filed a motion for intervention intervention.
alleging that upon request of NSS, Crestamonte’s general agent in Japan, KK Shell 13. On May 19,1987, petitioner Fu Hing Oil Co., Ltd. (hereinafter referred to as
provided and supplied marin diesel oil to the MV Estrella at the ports of Tokyo and Fu Hing"), acorporation organized in Hong Kong and not doing business in
Mutsur in Japan and that Crestamonte has failed to pay $16,996 and 1M yen.The trial the Philippines, filed a motion forleave to intervene with an attached
court allowed the intervention of Fu Hing and KK Shell. Writs of preliminary complaint-in-intervention, alleging that Fu Hing suppliedmarine diesel
attachment were issued upon posting of appropriate bonds. Upon the posting of oil/fuel to the MV Estella and incurred barge expenses for the total sum of
counterbonds, the writs of attachment were discharged.Atlantic and the MV Estrella OneHundred Fifty-two Thousand Four Hundred Twelve Dollars and
moved to dismiss the complaint-in-intervention filed by Fu Hing and KK Shell. Fifty-Six Cents(US$152,412.56) but such has remained unpaid despite
Thereafter, CA annulled the orders of the trial court and directed it to cease and desist demand and that the claim constitutes amaritime lien. The issuance of a writ
from proceeding with the case. According to the Court of Appeals, Fu Hing and K.K. of attachment was also prayed for.
Shell were not suppliers but sub-agents of NSS, hence they were bound by the 14. On July 16, 1987, petitioner K.K. Shell Sekiyu Osaka Hatsubaisho
Agency Agreement between Crestamonte and NSS, particularly, the choice of forum (hereinafter referredto as K.K. Shell"), a corporation organized in Japan and
clause, which provides that any matter of dispute shalle be resolved in the district not doing business in the Philippines,likewise filed a motion to intervene with
courts of Japan. The issue is WoN the Court acquired jurisdiction – YES. As the an attached complaint-in-intervention, alleging thatupon request of NSS,
choice-of-forum clause in the agreement (paragraph 12.0) has not been conclusively Crestamonte's general agent in Japan, K.K. Shell provided and
shown to be binding upon K.K. Shell, additional evidence would also still have to be suppliedmarine diesel oil/fuel to the W Estella at the ports of Tokyo and
presented to establish this defense, K.K. Shell cannot therefore, as of yet, be barred Mutsure in Japan and thatdespite previous demands Crestamonte has failed
from instituting an action in the Philippines. to pay the amounts of Sixteen Thousand NineHundred Ninety-Six Dollars
DOCTRINE: Neither are we ready to rule on the private respondents' invocation of and Ninety- Six Cents (US$16,996.96) and One Million
the doctrine of forum non conveniens, as the exact nature of the relationship of the Yen(Y1,000,000.00) and that K.K. Shell's claim constitutes a maritime lien
 on the MV Estella. Thecomplaint-in-intervention sought the issuance of a indeed maritime lienholders and as such may enforce the lien against the MV
writ of preliminary attachment. Estella are matters that still have to be established.
15. Thereafter, CA annulled the orders of the trial court and directed it to cease 5. Neither are we ready to rule on the private respondents' invocation of the
and desist from proceeding with the case. According to the Court of Appeals, doctrine of forum non conveniens, as the exact nature of the relationship of
Fu Hing and K.K. Shell were not suppliers but sub-agents of NSS, hence they the parties is still to be established. We leave this matter to the sound
were bound by the Agency Agreement between Crestamonte and NSS, discretion of the trial court judge who is in the best position, after some vital
particularly, the choice of forum clause, which provides that any matter of facts are established, to determine whether special circumstances require that
dispute shalle be resolved in the district courts of Japan. his court desist from assuming jurisdiction over the suit.
ISSUE/s:
1. WoN the Court acquired jurisdiction – – YES. As the choice-of-forum
clause in the agreement (paragraph 12.0) has not been conclusively shown to
be binding upon K.K. Shell, additional evidence would also still have to be
presented to establish this defense, K.K. Shell cannot therefore, as of yet, be
barred from instituting an action in the Philippines.

RULING: WHEREFORE, the petition is GRANTED and the decision of the Court
of Appeals is REVERSED in CA-G.R. SP No. 12999, insofar as it annulled the order
of the August 11, 1987 and directed the trial court to cease and desist from
proceeding with Civil Case No. 87-38930

RATIO:
1. Private respondents have anticipated the possibility that the courts will not
find that K.K.Shell is expressly bound by the Agency Agreement, and thus
they fall back on the argument thateven if this were so, the doctrine of forum
non conveniens would be a valid ground to cause thedismissal of K.K. Shell's
complaint-in-intervention. K.K. Shell counters this argument by invoking its
right as maritime lienholder. It cites Presidential Decree No. 1521, the Ship
Mortgage Decree of 1978, which provides:
SEC. 21. Maritime Lien for Necessaries; person entitled to such lien-Any person
furnishing repairs, supplies, to wage, use of dry dock or marine railway, or other
necessaries, to any vessel, whether foreign or domestic, upon the order of the owner ofsuch vessel,
or of a person authorized by the owner, shall have a maritime lien on thevessel, which may be
enforced by suit in rem, and it shall be necessary to allege or prove that credit was given to the
vessel.
2. Private respondents on the other hand argue that even if P.D. No. 1521 is
applicable, K.K. Shell cannot rely on the maritime lien because the fuel was
provided not exclusively for thebenefit of the MV Estella, but for the benefit
of Crestamonte in general.
3. Under the law it must be established that the credit was extended to the vessel
itself. Now, this is a defense that calls precisely for a factual determination
by the trial court of who benefitted from the delivery of the fuel.
4. Hence, again, the necessity for the reception of evidence before the trial court.
In other words, considering the dearth of evidence due to the fact that the
private respondents have yet to file their answer in the proceedings below and
trial on the merits is still to be conducted, whether or not petitioners are
 006 COMMUNICATION MATERIALS v. CA (MERILLES) 3. ITEC, International (ITEC), is a foreign corporation existing under the laws
August 22 1996 | Torres Jr, J. | Assumption of jurisdiction v. forum non-conveniens of the State of Alabama, USA. ITEC is not licensed to do business in the PH.
4. ITEC entered into a contract with ASPAC called the “Representative
Agreement”
PETITIONER: Communication Materials and Design Inc. (CMDI), and a. ITEC engaged ASPAC as its exclusive representative in the PH for
ASPAC Multi-Trade Inc, (ASPAC), and Francisco Aguirre the sale of its products
RESPONDENTS: Court of Appeals, ITEC International, ITEC, Inc. b. In consideration, ASPAC was paid commission
c. The agreement was signed by Clark and Aguirre, presidents of ITEC
SUMMARY: ITEC and ASPAC entered into a Representative Agreement and ASPAC respectively
whereby ASPAC would be the exclusive representative of ITEC in the PH. d. The agreement was initially for a term of 24 months
However, ASPAC adopted the name of ITEC and made several transactions e. After its lapse, it was renewed for another 24 months
involving products similar to that of ITEC without its permission. With this, ITEC 5. Through a License Agreement entered into ASPAC was able to incorporate
filed a suit before the RTC of Makati for CMDI/ASPAC to cease and desist from and use the name ITEC in its own name
pursuing fraudulent transactions. a. Thus, ASPAC Multi-Trade Inc became legally and publicly known
as ASPAC-ITEC (Philippines)
CMDI/ASPAC filed a motion to dismiss on the ground that ITEC had not capacity 6. Through ASPAC-ITEC, ASPAC and PLDT executed a document called
to sue before PH because it is a foreign corporation doing in business in the PH. “PLDT-ASPAC/ITEC Protocol”
That without the required license from he BOI and SEC, it cannot sue before PH a. Said document defined the project details for the supply of ITEC’s
courts. The RTC and CA, denied CMDI’s claims and ruled in favor of ITEC. Interface Equipment in connection with the Fifth Expansion
Program of PLDT
The issue before the SC is whether ITEC has capacity to sue before PH Courts. 7. One year into the second term of the Representative Agreement, ITEC
The SC held that generally a foreign corporation doing business in the PH without decided to terminate the same, because ASPAC allegedly violated its
proper license cannot claim remedies before PH courts. However, by virtue of the contractual commitment as stipulated in their agreements
principle of estoppel, domestic corporations who enter into contracts with 8. ITEC charges ASPAC and ASPAC-ITEC together with another domestic
unlicensed foreign corporations may be sued for it is presumed that they willingly corproation, Digital Base Communications Inc., of using knowledge and
and intelligently entered into such agreement. Therefore, CMDI is estopped from information of ITECs products specifications to develop their own line of
alleging the incapacity of ITEC. equipment and product support, which are similar, if not identical to ITECs
own, and offering them to ITECs former customer.
DOCTRINE: A foreign corporation doing business in the Philippines may sue 9. A civil case was filed with he RTC of Makati by ITEC.
in Philippine Courts although not authorized to do business here against a 10. ITEC sought to enjoin:
Philippine citizen or entity who had contracted with and benefited by said a. DIGITAl, CMDI, Aguirre, and their agents and business associates
corporation. One who has dealt with a corporation of foreign origin as a corporate to cease and desist from selling to PLDT and any other party,
entity is estopped to deny its corporate existence and capacity. products which have been copied or manufactured in like miner or
identical to the products, wares and equipment of ITEC
b. ASPAC, to cease and desist from using in its corporate name, letter
FACTS: heads, envelopes, sign boards and business dealings, plaintiffs
1. “Business Corporations, according to Lord Coke, have no souls. They do trademark, internationally known as ITEC
business peddling goods, wares or even services across national boundaries c. From both in sodium damages up to P500k, attorneys fees and
in soulless forms in quest for profits albeit at times, unwelcomed in these litigation expenses.
strange lands venturing into uncertain markets and, the risk of dealing with 11. CMDI, et al. filed a motion to dismiss on the following grounds:
wily competitors.” a. ITEC has no legal capacity to sue in the PH as it is a foreign
2. Communication Materials and Design Inc. (CMDI), and ASPAC Multi- corporation doing business in the PH without the required BOI
Trade Inc, (ASPAC) are both domestic corporations, while Francisco Aguirre authority andSEC license
is their President and majority stockholder b. ITEC is engeaged in forum shopping, which justifies the application
 against it the principle of forum non conveniens below for CMDI likewise reveal the continuous character of doing business
12. The RTC denied the motion to dismiss for being void of legal merit in the Philippines by ITEC
13. CMDI raised the matter to the CA. The CA likewise dismissed. An MR was 6. CMDI likewise argue that since ITEC have no capacity to bring suit here,
filed but was denied. the Philippines is not the most convenient forum because the trial court is
14. Hence, this petition before the SC. devoid of any power to enforce its orders issued or decisions rendered in a
case that could not have been commenced to begin with, such that in insisting
ISSUE/s: to assume and exercise jurisdiction over the case below, the trial court had
1. WON ITEC has capacity to sue before PH Courts - NO, BUT A foreign gravely abused its discretion and even actually exceeded its jurisdiction.
corporation doing business in the Philippines may sue in Philippine Courts 7. In determining whether a corporation does business in the Philippines or not,
although not authorized to do business here against a Philippine citizen or aside from their activities within the forum, reference may be made to the
entity who had contracted with and benefited by said corporation. One who contractual agreements entered into by it with other entities in the country.
has dealt with a corporation of foreign origin as a corporate entity is estopped 8. The SC is persuaded that ITEC had been engaged in or doing business in the
to deny its corporate existence and capacity. Philippines for some time now. This is the inevitable result after a scrutiny of
the different contracts and agreements entered into by ITEC with its various
RULING: IN VIEW OF THE FOREGOING PREMISES, the instant Petition is business contacts in the country.
hereby DISMISSED. The decision of the Court of Appeals dated June 7, 1991, 9. Notwithstanding such finding that ITEC is doing business in the country,
upholding the RTC Order dated February 22, 1991, denying the petitioners Motion to CMDI is nonetheless estopped from raising this fact to bar ITEC from
Dismiss, and ordering the issuance of the Writ of Preliminary Injunction is hereby instituting this injunction case against it.
affirmed in toto. 10. A foreign corporation doing business in the Philippines may sue in
RATIO: Philippine Courts although not authorized to do business here against a
1. CMDI suggests that ITEC is a foreign corporation actually doing business in Philippine citizen or entity who had contracted with and benefited by
the Philippines without the requisite authority and license from the Board of said corporation
Investments and the Securities and Exchange Commission, and thus, 11. To put it in another way, a party is estopped to challenge the personality of a
disqualified from instituting the present action in our courts corporation after having acknowledged the same by entering into a contract
2. It is their contention that the provisions of the Representative Agreement, with it.
petitioner ASPAC executed with ITEC, are similarly highly restrictive in 12. And the doctrine of estoppel to deny corporate existence applies to a foreign
nature as well as to domestic corporations.
3. Their Representative Agreement is likened to that discussed in the case of 13. One who has dealt with a corporation of foreign origin as a corporate
Top-Weld v ECED: entity is estopped to deny its corporate existence and capacity.
a. It that case the SC ruled that foreign corporations are doing business 14. The principle will be applied to prevent a person contracting with a foreign
in the Philippines because when the respondents entered into the corporation from later taking advantage of its noncompliance with the
disputed contracts with the petitioner, they were carrying out the statutes chiefly in cases where such person has received the benefits of the
purposes for which they were created, i.e., to manufacture and contract.
market welding products and equipment. 15. The doctrine of lack of capacity to sue based on the failure to acquire a local
b. A reading of the agreements between the petitioner and the license is based on considerations of sound public policy.
respondents shows that they are highly restrictive in nature, thus a. The license requirement was imposed to subject the foreign
making the petitioner a mere conduit or extension of the corporation doing business in the Philippines to the jurisdiction of
respondents. its courts.
4. It is alleged that certain provisions of the Representative Agreement executed b. It was never intended to favor domestic corporations who enter into
by the parties are similar to those found in the License Agreement of the solitary transactions with unwary foreign firms and then repudiate
parties in the Top-Weld case which were considered as highly restrictive by their obligations simply because the latter are not licensed to do
this Court. business in this country.
5. CMDI contend that the above acts or activities belie the supposed 16. By entering into the Representative Agreement with ITEC, CMDI is charged
independence of ASPAC from ITEC. The unrebutted evidence on record with knowledge that ITEC was not licensed to engage in business activities
 in the country, and is thus estopped from raising in defense such incapacity
of ITEC, having chosen to ignore or even presumptively take advantage of
the same.
17. CMDI’s insistence on the dismissal of this action due to the application,
or non application, of the private international law rule of forum non
conveniens defies well-settled rules of fair play.
18. According to CCMDI, the Philippine Court has no venue to apply its
discretion whether to give cognizance or not to the present action, because it
has not acquired jurisdiction over the person of the plaintiff in the case, the
latter allegedly having no personality to sue before Philippine Courts.
a. This argument is misplaced because the court has already acquired
jurisdiction over the plaintiff in the suit, by virtue of his filing the
original complaint.
b. And as we have already observed, CMDI are not at liberty to
question plaintiffs standing to sue, having already acceded to the
same by virtue of its entry into the Representative Agreement
referred to earlier.
19. Thus, having acquired jurisdiction, it is now for the Philippine Court,
based on the facts of the case, whether to give due course to the suit or
dismiss it, on the principle of forum non conveniens.
20. Hence, the Philippine Court may refuse to assume jurisdiction in spite of its
having acquired jurisdiction.
21. Conversely, the court may assume jurisdiction over the case if it chooses
to do so; provided, that the following requisites are met:
a. That the Philippine Court is one to which the parties may
conveniently resort to;
b. That the Philippine Court is in a position to make an intelligent
decision as to the law and the facts; and,
c. That the Philippine Court has or is likely to have power to
enforce its decision
007 FIRST PHILIPPINE INTERNATIONAL BANK v. CA16 (PELIÑO) choice of venues, as it was originally understood in conflicts of laws, but also to a choice
January 24, 1996 | Panganiban, J. | Forum non-conveniens of remedies. The test for determining whether a party violated the rule against forum-
shopping has been laid down, where forum-shopping exists where the elements of litis
pendentia are present or where a final judgment in one case will amount to res judicata in
PETITIONERS: First Philippine International Bank (Formerly Producers Bank of the
the other, as follows: (i) Identity of parties, or at least such parties as represent the same
Philippines) and Mercurio Rivera
interests in both actions; (ii) Identity of rights asserted; (iii) relief prayed for. In this case,
RESPONDENTS: Court of Appeals, Carlos Ejercito, in substitution of Demetrio
it satisfies the conditions since: the original complaint which gave rise to the instant petition
Demetria, and Jose Janolo
was filed by the buyer against the seller to enforce the alleged perfected sale of real estate
and the Second Case, the majority stockholders, in representation of the FPIB, are seeking
SUMMARY: BYME owned 6 parcels of land, but it was mortgaged to FPIB as collateral
to accomplish what the FPIB itself failed to do in the original case in the trial court. The
for a loan. Demetria and Janolo manifested their intention to purchase the property to the
objective or the relief being sought, although worded differently, is the same, which is to
lawyer of BYME, so he suggested to meet with the Head Manager of the Prop. Mgt. Dept.
enable FPIB to escape from the obligation to sell the property to Demetria and Janolo; there
of FPIB, which was Rivera. Janolo sent a letter to Rivera pegging their offer to buy the
is also identity of parties, or at least, of interests represented. Although the plaintiffs in the
property at 3.5 million in cash. Rivera sent a counter-offer for 5.5 million. Janolo sent a
Second Case were Henry Co, etc., are not the named parties in the First Case, they represent
counter to the counter-offer for 4.250 million in cash, but that letter was never replied to.
the same interest and entity, namely FPIB.
But Demetria, Janolo, Luis Co (SVP of FPIB), Rivera, and BYME’s lawyer had a meeting,
wherein they agreed that 5.5 million will be the price. Demetria and Janolo tendered
DOCTRINE: Forum shopping occurs when a party attempts to have this action tried in a
payment and wanted FPIB to hand over the documents since the sale was perfected already,
particular court or jurisdiction where he feels he will receive the most favorable judgment
but Rivera replied saying that the letter has been referred to the office of the Conservator,
or verdict. In the PH, forum shopping has acquired a connotation encompassing not only a
but no reply was ever given. Demetria and Janolo made a 2nd tender of payment, but still
choice of venues, as it was originally understood in conflicts of laws, but also to a choice
no response. So through counsel, they made a demand for compliance of the perfected
of remedies. The test for determining whether a party violated the rule against forum-
contract of sale, but FPIB, through Encarnacion, repudiated Rivera’s authority, claiming
shopping has been laid down, where forum-shopping exists where the elements of litis
that his dealings, particularly the counter-offer was unauthorized and illegal. So Demetria
pendentia are present or where a final judgment in one case will amount to res judicata in
and Janolo filed a case for specific performance with damages in the RTC and the RTC
the other, as follows: (i) Identity of parties, or at least such parties as represent the same
ruled in their favor. So FPIB filed an appeal in the CA. Henry Co filed a motion to intervene
interests in both actions; (ii) Identity of rights asserted; (iii) relief prayed for.
but the RTC denied since the case was already concluded and is pending appeal in the CA.
But while the case was pending in the CA, Henry Co + other stockholders filed a derivative **The issue related to forum-shopping is the only issue which is explained in detail in
suit in the RTC to declare any perfected sale as unenforceable. The issue in this case is this digest. All other issues are not since it involves Sales and Oblicon.**
whether or not the filing of a derivative suit by a majority of the shareholders and directors FACTS:
of FPIB to prevent the implementation of the sale, while a suit for specific performance is 1. Parties:
pending, violates the ban against forum-shopping. The SC held in the affirmative. Forum- a. First Philippine International Bank (FPIB) - banking institution
shopping originated as a concept in private international law, where non-resident litigants
organized and existing under PH laws.
are given the option to choose the forum or place wherein to bring their suit for various
reasons or excuses, including to secure procedural advantages, to annoy and harass the b. Mercurio Rivera (Rivera) - of legal age, Head Manager of the Property
defendant, to avoid overcrowded dockets, or to select a more friendly venue. To combat Management Department of FPIB.
these excuses, the principle of forum non conveniens was developed, whereby a court, in c. Carlos Ejercito (Ejercito) - legal age, assignee of original plaintiff-
conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most appellees Demetrio Demetria (Demetria) and Jose Janolo (Janolo).
“convenient” or available forum and the parties are not precluded from seeking remedies d. Luis Co - Senior VP of FPIB
elsewhere. Forum shopping occurs when a party attempts to have this action tried in a e. Henry Co - stockholder
particular court or jurisdiction where he feels he will receive the most favorable judgment f. Encarnacion - Acting Conservator
or verdict. In the PH, forum shopping has acquired a connotation encompassing not only a 2. FPIB (back then its name was Producers Bank), acquired 6 parcels of land

16
GENERAL OVERVIEW OF THE CASE: Originally BYME owned the 6 parcels of land, but then it was and tendering payment, FPIB refused to comply with the sale. They made a 2nd tender of payment, but no
mortgaged with FPIB as collateral for a loan. Demetria and Janolo expressed their intent to buy the land, so reply again. When FPIB replied, it repudiated the authority of Rivera, so the dealings with Rivera were
the lawyer of BYME told the 2 to meet with Rivera, who was the manager of the Property Mgt. Dept. of illegal and unauthorized. So, Demetria and Janolo filed a case for specific performance with damages.
FPIB. So, Demetria and Janolo made a formal purchase through a letter. Rivera replied, but the reply was a Demetria and Janolo won in that case. An appeal was made in the CA (during this time Ejercito substituted
counter-offer. Janolo replied back, and made a counter to the counter-offer, but there was no reply. But what the 2) and while the case was pending, Henry Co + other stockholders, filed a derivative suit in the RTC to
happened was a meeting took place between Demetria, Janolo, Luis, with Rivera and Fajardo present. Janolo stop Ejercito from enforcing or implementing the sale.
sent a letter saying that they were accepting the counter-offer of FPIB. But despite sending several letters
 with a total area of 101 ha located at Don Jose, Sta. Rosa, Laguna, and 8. FPIB, through Rivera, acknowledged receipt of the preceeding mentioned
covered by TCTs. The property used to be owned by BYME Investment and letter and stated, in its communication of December 2, 1987, that the letter
Development Corporation (BYME) which had them mortgaged with FPIB as has been “referred to the office of the Conservator for proper disposition”.
collateral for a loan. a. But no response came from the Acting Conservator.
a. The original plaintiffs, Demetria and Janolo, wanted to purchase the b. On December 14, 1987, Demetria and Janolo made a 2nd tender of
property and thus initiated negotiations for that purpose. payment, this time through the Acting Conservator, Encarnacion.23
3. In the early part of August 1987, Demetria and Janolo, upon the suggestion 9. The letter drew no response for more than 4 mos. Then, on May 3, 1988,
of BYME’s legal counsel, Jose Fajardo, met with Rivera. The meeting was Demetria and Janolo, through counsel, made a final demand for compliance
held pursuant to Demetria and Janolo’s plan to buy the property. After the by FPIB with its obligations under the considered perfected contract of sale.
meeting, Janolo, following Rivera’s advice, made a formal purchase offer to a. In a reply letter dated May 12, 1988, FPIB, through Encarnacion,
the FPIB through a letter dated August 30, 1987.17 repudiated the authority of Rivera and claimed that his dealings with
4. On September 1, 1987, Rivera made, on behalf of the bank, a formal reply by Demetria and Janolo, particularly the counter-offer of P5.5 million are
letter.18 unauthorized or illegal.
5. On September 17, 1987, Janolo responded to Rivera’s reply.19 b. On that basis, FPIB justified the refusal of the tenders of payment and
a. But there was no reply to Janolo’s letter, but what took place was a the non-compliance with the obligations under what Demetria and Janolo
meeting on September 28, 1987 between Demetria, Janolo and Luis Co, considered to be a perfected contract of sale.
the Senior VP of FPIB. Rivera and Fajardo (the lawyer of BYME), 10. On May 16, 1988, Demetria and Janolo filed a suit for specific
attended the meeting as well. performance with damages against FPIB, Rivera, and Encarnacion.
b. 2 days later, Janolo sent to FPIB, through Rivera, a letter.20 (First Case)
6. On October 12, 1987, the conservator of the FPIB (which has been placed a. The basis of the suit was that the transaction had with the bank resulted
under conservatorship by the Central Bank since 1984) was replaced by an in a perfected contract of sale.
Acting Conservator in the person of Leonida T. Encarnacion (Encarnacion). b. FPIB took the position that there was no such perfected sale because
On November 4, 1987, Rivera wrote Demetria a letter.21 Rivera is not authorized to sell the property, and there was no meeting of
7. What transpired after was a series of demands by Demetria and Janolo for the minds as to the price.
compliance by FPIB with what they considered as a perfected contract of 11. On March 14, 1991, Henry Co (the brother of Luis), through Sycip Salazar
sale, which demands were in one form or another refused by the FPIB. law firm (as counsel), filed a motion to intervene in the trial court, alleging
a. On November 17, 1987, Demetria and Janolo, through a letter to Rivera, that as owner of 80% of FPIB’s outstanding shares of stock, he had a
tendered payment of the amount of P5.5 million pursuant to the substantial interest in resisting the complaint.
“perfected sale agreement”. a. On July 8, 1991, the trial court issued an order denying the motion to
b. But the FPIB and Rivera refused to receive both the payment and letter. intervene on the ground that it was filed after trial had already been
c. Instead, the parcels of land involved in the transaction were advertised concluded.
by the bank for sale to any interested buyer. b. It also denied a MR filed thereafter.
d. Demetria and Janolo demanded the execution by the bank of the c. RTC ruled in favor of Demetria and Janolo.
documents on what was considered as a “perfected agreement.”22 d. From the trial court’s decision, FPIB, Rivera, and Encarnacion
appealed to the CA, which affirmed with modification the said

17 22
The letter states Janolo’s formal offer to purchase the properties covered by titles. The offer he gave was The letter states that it appears that the counter-offer dated 1 September 1987 of the same lot in the amount
for P3,500,000.00 in cash, for the 6 properties, with a total area of 101 ha, more or less. of P5.5 million was accepted by Janolo on 30 September 1987 and was received by Rivera on 5 October
18
The bank’s letter states its counter-offer, which is at P5.5 million for more than 101 ha. on lot basis. 1987. It was believed that an agreement had been perfected. There was also repeated follow-up to
19
Janolo sent a reply to the FPIB’s counter-offer, and Janolo said that he would like to amend his previous consummate the purchase, but that FPIB and Rivera refused to honor the commitment and that the lot has
offer and he now proposed to buy the lot for P4.250 million in cash. been advertised for sale. The letter states further that they are making a formal demand to consummate the
20
The letter says that based on the discussion last 28 September 1987, they were accepting the offer to contract within 3 days and that Janolo and Demetria are ready to remit the P5.5 agreed upon, otherwise they
purchase the property at Sta. Rosa, Laguna, for a total of P5,500,000.00. will file a case.
21 23
Rivera sent a letter saying that the proposal is being studied by the newly created committee for The letter states that they are sending the P5.5 as agreed, in connection with the perfected agreement
submission to the newly designated Acting Conservator of the bank. consequent from the offer of 5.5 million as the purchase price of the lots.
 judgment. Henry Co did not appeal the denial of his motion for authority.
intervention. 7. If #3 is true, WON the contract was enforceable under the statute of frauds. -
12. In the course of the proceedings in the CA, Carlos Ejercito was substituted in YES, FPIB never objected to the testimony, thus deemed waived.
place of Demetria and Janolo, in view of the assignment of the latters’ rights 8. WON the bank conservator has the unilateral power to repudiate the authority
in the matter in litigation to the private respondent. of the bank officers and/or to revoke the contract. - NO, the Central Bank Act
13. On July 11, 1992, during the pendency of the proceedings in the CA, merely gives the conservator power to revoke contracts that are deemed to be
Henry Co, and several other stockholders of FPIB, through counsel defective.
ACCRA, filed an action purportedly a “derivative suit” with the RTC of 9. WON the CA committed any reversible error in its findings of facts. - NO,
Makati, Br. 134, against Encarnacion, Demetria and Janolo to declare FPIB was not able to substantiate that the CA committed error.
any perfected sale of the property as unenforceable and to stop Ejercito
from enforcing or implementing the sale. (Second Case) RULING: WHEREFORE, finding no reversible error in the questioned Decision and
a. In his answer, Janolo argued that the second case was barred by litis Resolution, the Court hereby DENIES the petition. The assailed decision is
pendentia by virtue of the case pending in the CA. AFFIRMED. Moreover, FPIB is REPRIMANDED for engaging in forum-shopping
b. During the pre-trial conference in the 2nd case, the plaintiffs filed a and WARNED that a repetition of the same or similar acts will be dealt with more
Motion for Leave of Court to Dismiss the Case Without Prejudice. severely.
c. Private respondent opposed the meotion on the ground that the plaintiff’s
act of forum shopping justifies the dismissal of both cases, with RATIO:
prejudice. On whether there was forum shopping
d. Private respondent, in his memorandum, averred that this motion is still 1. In order to prevent the vexations of multiple petitions and actions, the SC
pending in the Makati RTC. promulgated Revised Circular No. 28-91, requiring that a party “must certify
FPIB & RIVERA POSITIONS EJERCITO (IN BEHALF OF DEMETRIA under oath that (a) he has not theretofore commenced any other action or
& JANOLO) proceeding involving the same issues in the SC, CA, or any other tribunal or
CA erred in declaring that a contract of sale FPIB & Rivera engaged in forum shopping
was perfected between Ejercito (in sub of agency; (b) to the best of his knowledge, no such action or proceeding is
Demetria and Janolo) and the bank. pending” in said courts or agencies.
CA erred in declaring the existence of an Factual findings and conclusions of the CA a. Violation of the said circular entails sanctions that include the summary
enforceable contract of sale between the are supported by the evidence on record and dismissal of the multiple petitions or complaints.
parties. may no longer be questioned in this case.
b. FPIB and Rivera included a verification/certification in their petition,
CA erred in declaring that the conservator CA correctly held that there was perfected
does not have the power to overrule or contract between Demetria and Janolo and stating for the record, that the pendency of Civil Case before the RTC of
revoke acts of previous management. the bank. Makati, Br. 134, involving a derivative suit, filed by stockholders of
Findings of CA do not conform to the CA has correctly held that the conservator, FPIB against the conservator and other defendants but which is the
evidence on record. apart form being estopped from repudiating subject of a pending MTD without Prejudice.
the agency and the contract, has no authority
2.
to revoke the contract of sale.
FPIB & RIVERA (arguments for why there EJERCITO (why there is forum
is no forum shopping) shopping)
ISSUE/s: In the First Case, from which the In spite of the verification, FPIB and
5. WON the filing of a derivative suit by a majority of the shareholders and proceeding arose, FPIB was impleaded Rivera are guilty of actual forum
directors of FPIB to prevent the implementation of the sale, while a suit for as a defendant, whereas in the Second shopping because the instant petition
Case (assuming that FPIB is a real party pending before the SC involves
specific performance is pending, violates the ban against forum-shopping. -
in interest in a derivative suit) it was the “identical parties or interests
YES, a decision recognizing the perfection and directing the enforcement of plaintiff. represented, rights asserted and
the contract of sale will directly conflict with a possible decision in the reliefs sought (as that) currently
Second Case, barring the parties from enforcing or implementing the said pending before the RTC, Makati Br.
sale. 134 in the Second Case.
6. WON there was a perfected contract of sale between the parties. - YES, the Derivative suit is not properly a suit for The 2 cases are so intertwined that a
and in behalf of the corporation under the judgment or resolution in either case
basis why they were assailing the contract was the authority of Rivera, but circumstances. will constitute res judicata in the other.
the SC said that Rivera had authority, on the basis of the doctrine of apparent Although the certification/verification
 signed by FPIB president and attached to f. To avoid or minimize this unethical practice of subverting justice, the SC
the petition identifies the action as a promulgated Circular 28-91. Even before that, the SC had proscribed it
“derivative suit” it “does not mean that it
is one” and “that it is a legal question for
in the Interim Rules and Guidelines issued on 11 January 1983, and had
the courts to the decide. struck down in several cases the inveterate use of this insidious
FPIB & Rivera did not hide the Second malpractice.
Case as they mentioned it in the g. Forum shopping as “the filing of repetitious suits in different courts” has
verification/certification. been condemned by Justice Narvasa in Minister of Natural Resources v.
3. The SC rules for Ejercito. Heirs of Hughes, et. al. as a reprehensible manipulation of court
a. Forum-shopping originated as a concept in private international processes and proceedings.
law, where non-resident litigants are given the option to choose the h. The test for determining whether a party violated the rule against
forum or place wherein to bring their suit for various reasons or forum-shopping has been laid down in the 1986 case of Buan v.
excuses, including to secure procedural advantages, to annoy and Lopez, by CJ Narvasa, where forum-shopping exists where the
harass the defendant, to avoid overcrowded dockets, or to select a elements of litis pendentia are present or where a final judgment in
more friendly venue. one case will amount to res judicata in the other, as follows:
b. To combat these less than honorable excuses, the principle of forum i. Identity of parties, or at least such parties as represent the same
non conveniens was developed, whereby a court, in conflicts of law interests in both actions;
cases, may refuse impositions on its jurisdiction where it is not the ii. Identity of rights asserted; and
most “convenient” or available forum and the parties are not iii. relief prayed for, the relief being founded on the same facts, and the
precluded from seeking remedies elsewhere. identity on the 2 preceding particulars is such that any judgment
c. Forum shopping (as defined in Black’s Law) occurs when a party rendered in the other action, will, regardless of which party is
attempts to have this action tried in a particular court or jurisdiction successful, amount to res adjudicate in the action uder
where he feels he will receive the most favorable judgment or verdict. consideration: all the requisites, in fine, of auter action pendant.
i. According to Words and Phrases, a litigant is open to the charge of i. Consequently, where a litigant (or one representing the same interest or
forum shopping whenever he chooses a forum with slight person) sues the same party against whom another action/s for the alleged
connection to factual circumstances surrounding his suit, and violation of the same right and the enforcement of the same relief is/are
litigants should be encouraged to attempt to settle their differences still pending, the defense of litis pendencia in one case is a bar to the
without imposing undue expense and vexatious situations on the others; and a final judgment in one would constitute res judicata and thus
courts. would cuse the dismissal of the rest.
d. In the PH, forum shopping has acquired a connotation encompassing not j. In either case, forum shopping could be cited by the other party as a
only a choice of venues, as it was originally understood in conflicts of ground to ask for summary dismissal of the 2 or more complaints or
laws, but also to a choice of remedies. petitions, and for the imposition of the other sanctions, which are direct
i. As to choice of venues, the ROC allows a plaintiff to commence contempt of court, criminal prosection, and disciplinary action against
personal actions where the defendant or any of the defendants the erring lawyer.
resides or may be found, or where the plaintiff or any of the k. In this case, applying the principles, comparing it with the Second Case,
plaintiffs resides, at the election of the plaintiff. there exist identity of parties or interests represented, identity of rights or
ii. As to remedies, aggrieved parties, for example, are given a choice causes and identity of reliefs sought.
of pursuing civil liabilities independently of the criminal, arising i. The original complaint in the court a quo which gave rise to the
from the same set of facts.24 instant petition was filed by the buyer against the seller to enforce
e. What originally started both in conflicts of laws and in our domestic law the alleged perfected sale of real estate.
as a legitimate device for solving problems has been absued and misused ii. The complaint in the Second case seeks to declare the purported sale
to assure scheming litigants of dubious reliefs.

24
The example given is that a passenger of a public utility vehicle involved in a vehicular accident may sue
on culpa contractual, culpa aquiliana, or culpa criminal-each remedy being available independently of the
others-although he can’t recover more than once.
 involving the same real property “as unenforceable as against FPBI. i. Corporate veil can’t be used to shield an otherwise blatant violation
iii. In the Second Case, the majority stockholders, in representation of of the prohibition against forum-shopping. Shareholders, whether
the FPIB, are seeking to accomplish what the FPIB itself failed to they’re suing as a majority or minority, can’t be allowed to trifle
do in the original case in the trial court. The objective or the relief with court processes, particularly where the corporation itself has
being sought, although worded differently, is the same, which is to not been remiss in vigorously prosecuting or defending corporate
enable FPIB to escape from the obligation to sell the property to causes. To rule otherwise would be to encourage corporate litigants
Demetria and Janolo (now it’s Ejercito). to use their shareholders as fronts to circumvent the stringent rules
iv. Danville Maritime v. COA: the filing by a party of 2 apparently against forum shopping.
different actions, but with the same objective, constituted forum o. FPIB argues that there can’t be forum shopping even assuming arguendo
shopping. Although the relief prayed for are ostensibly different, the that there is identity of parties, cause of action, and reliefs sought because
ultimate objective in both actions is the same. FPIB was the defendant in the first case, while it was plaintiff in the
l. In this case, there is also identity of parties, or at least, of interests Second Case on the basis of Victronics Computers v. RTC Br. 63 of
represented. Although the plaintiffs in the Second Case were Henry Co, Makati. While Ejercito argues that there is a difference in factual setting
etc., are not the named parties in the First Case, they represent the same between the 2 cases (defendants in that case didn’t file a responsive
interest and entity, namely FPIB because of the following: pleading in the 1st case, but in this case, they filed a responsive pleading).
i. Henry Co, et. al. are not suing in their personal capacities, for they i. SC said that praying for affirmative reliefs and interposing counter-
have no direct personal interest in the matter in controversy. They claims, FPIB and Rivera became plaintiffs in the original case,
are not principally or even subsdiarily liable, much less are they giving unto themselves the very remedies they repeated in the
direct parties in the assailed contract of sale; Second Case.
ii. The allegations of the complaint in the Second Case show that the p. Ultimately, what is truly important to consider in determining
stockholders are bringing a “derivative suit.” In the caption, FPIB whether there is forum-shopping is the vexation caused the courts
and Rivera claim to have brought suit “for and in behalf of the and parties-litigant by a party who asks different courts and/or
Producers Bank of the Philippines”. This is the very essence of a admin agencies to rule on the same or related causes and/or grant
derivative suit.25 In the derivative suit, the suing party is the nominal the same or substantially the same reliefs, in the process creating the
party, but the real party in interest is the corporation. possibility of conflicting decisions being rendered by different for a
m. Despite the admissions taken from the complaint in the Second Case, upon the same issue.
FPIB and Rivera sought to deny that the Second Case was a derivative i. In this case, this is exactly the problem: a decision recognizing the
suit, reasoning that it was brought not by the minority shareholders, but perfection and directing the enforcement of the contract of sale will
by Henry Co, who not only own 80%, but also constitute the majority of directly conflict with a possible decision in the Second Case, barring
the BOD of FPIB. the parties from enforcing or implementing the said sale. So a final
i. That being so, then they really represent the bank. Whether they decision in one, would resul in res judicata in the other.
sued directly or derivatively, there is undeniably an identity of
interests/entity represented. On whether the contract was perfected
n. FPIB and Rivera also tried to seek refuge in the corporate fiction that the 4. In essence FPIB was saying that a perfected sale could not have occurred
personality of FPIB is separate and distinct from the shareholders, but since Rivera was not clothed with authority to enter into the transaction, but
the SC said that the rulings of the court are consistent as to such matters the SC said that he had apparent authority, thus can act for FPIB, based on
(that when the fiction is used as a means of perpetrating fraud or an illegal several evidence.
act or as a vehicle for the evasion of an existing obligation, the
circumvention of statutes, the achievement or perfection of a monopoly On whether the contract is enforceable
or generally the perpetration of knavery or crime, then the court can 5. FPIB was claiming that even assuming that there was a verbal ofer to sell at
pierce the veil of corporate fiction). 5.5 million, it would be unenforceable since it wasn’t in writing, but the SC

25
An individual stockholder is permitted to institute a derivative suit on behalf of the corporation wherein refuse to sue, or are the ones to be sued or hold the control of the corporation. In such actions, the suing
he holds stock in order to protect or vindicate corporate rights, whenever the officials of the corporation stockholder is regarded as a nominal party, with the corporation as the real party in interest.
 said that statute of frauds would not apply by reason of the failure of FPIB to
object to the oral testimony proving FPIB’s counter offer, so since they failed
to object, they are deemed to have waived any defects.

On whether the conservator can revoke the perfected and enforceable contract
6. FPIB argues that the conservator has the power to revoke or overrule actions
of the mgt. or BOD of a bank based on the Central Bank Act, but SC said that
(1) this issue was raised for the first time and (2) there is no evidence that the
conservator, at the time the contract was perfected, actually repudiated or
overruled the contract of sale and what was actually repudiated by
Encarnacion (the conservator who took over after the contract was perfected)
was not the contract, but the authority of Rivera to make a binding offer, (3)
the Central Bank Act merely gives the conservator power to revoke contracts
that are deemed to be defective.

On whether there were reversible errors of fact

7. This is a Rule 45 petition, thus findings of fact by the CA are generally not
reviewable by the SC, and FPIB’s evidence failed to prove that there are
reversible errors of fact.
 008 MANILA HOTEL CORP. v. NLRC (PUNSALAN) FACTS:
Oct. 13, 2000 | Pardo, J. | Assumption of jurisdiction v forum non conveniens 26. The case is a petition for certiorari to annul the orders of the National Labor
Relations Commission (NLRC) for having been issued without or with excess
jurisdiction and with grave abuse of discretion
PETITIONER: The Manila Hotel Corp. and Manila Hotel Intl. Ltd.
RESPONDENTS: National Labor Relations Commission, Arbiter Ceferina J.
Diosana and Marcelo G. Santos Background
27. In May 1988, respondent Marcelo Santos (Santos) was an overseas worker
SUMMARY: During employment with the Mazoon Printing Press, Santos received employed as a printer at the Mazoon Printing Press, Sultanate of Oman.
a letter from Mr. Gerhard R. Shmidt, General Manager of Palace Hotel, Beijing, 28. In June 1988, Santos was directly hired by the Palace Hotel, Beijing, People’s
offering him a job in Palace Hotel as a printer but with a higher monthly salary and Republic of China and later terminated due to retrenchment
increased benefits. In 1988, Santos accepted the offer and resigned from Mazooon 29. When the case was filed in 1990, petitioner Manila Hotel Corporation (MHC)
Printing Press before proceeding to work in Palace Hotel which was in Beijing, China. was still a GOCC duly organized and existing under PH laws; on the other
Eventually, he was retrenched in 1989 due to the Tiananmen Square incidents and its hand, Manila Hotel International Company, Limited (MHICL) is a
effect on businesses in Beijing. Santos, through a lawyer, sent a letter to Mr. Shmidt corporation duly organized and existing under Hong Kong laws.
and demanded full compensation but Mr. Shmidt did not comply. Santos then filed a a. MHC is an incorporator of MHICL, owning 50% of its capital stock
complaint for illegal dismissal with the Arbitration Branch of NLRC against Manila 30. Through a management agreement with the Palace Hotel (Wang Fu Company
Hotel, et al. After questioning NLRC’s jurisdiction to try the case (which Manila Limited), MHICL trained the personnel and staff of the Palace Hotel at
Hotel, et al alleged that jurisdiction should be with POEA instead), the NLRC still Beijing
proceeded to decide on the case and decided in favor of Santos, stating that he was Actual Facts
illegally dismissed and awarded him the unpaid salaries and damages prayed for. 31. During employment with the Mazoon Printing Press, Santos received a letter
Issue: WoN NLRC was a seriously inconvenient forum (forum non conveniens) –
from Mr. Gerhard R. Shmidt, General Manager of Palace Hotel, Beijing.
YES, the conditions for forum non conveniens were unavailing in this case. It is hard
a. It informed Santos that he was recommended by Nestor Buenio,
to see how NLRC is a convenient forum given that all incidents of the case occurred
outside the PH. Considering also that the contract was perfected in foreign soil, a
who was Santos’ friend
decision cannot be made as to the law governing the employment contract. The NLRC b. Mr. Shmidt offered Santos the same position as printer, but with a
cannot also determine the facts considering that all the acts complained of occurred higher monthly salary and increased benefits
in Beijing, China. And even assuming NLRC had jurisdiction, it could not bind Palace 32. Santos wrote to Mr. Shmidt accepting the offer so the Palace Hotel Manager,
Hotel for it is a corporation incorporated under the laws of China and was not even Mr. Hans J. Henk mailed a ready-to-sign employment contract to Santos.
served with the proper summons. a. Mr. Henk advised Santos that if the employment contract was
This is not to say that Philippine courts and agencies have no power to solve acceptable, the latter was to return the same to the former in Manila,
controversies involving foreign employers. Neither are we saying that we do not have together with Santos’ passport and two additional pictures for his
power over an employment contract executed in a foreign country. If Santos were an visa to China
overseas contract worker, a Philippine forum, specifically the POEA, not the 33. On May 30, 1988, Santos thereafter resigned from the Mazoon Printing Press,
NLRC, would protect him. He is not an overseas contract worker a fact which effective June 30, 1988, under the pretext that he was needed at home to help
he admits with conviction with the family’s piggery and poultry business
34. Santos wrote to Palace Hotel acknowledging Mr. Henks’ letter. Santos
DOCTRINE: Under the rule of forum non conveniens, a Philippine court or enclosed 4 signed copies of the employment contract and notified them that
agency may assume jurisdiction over the case if it chooses to do so provided: he was going to arrive in Manila during the following month (July 4, 1988).
a. that the Philippine court is one to which the parties may a. The employment contract stated that his employment would
conveniently resort to; commence Sept. 1, 1988 for a period of 2 years.
b. that the Philippine court is in a position to make an intelligent
b. It provided for a monthly salary of US$900.00 net of taxes, payable
decision as to the law and the facts; and
14 times a year
c. that the Philippine court has or is likely to have power to enforce
35. On June 30, 1988, Santos was deemed resigned from the Mazoon Printing
its decision
Press. He then arrived in Manila on July 1, 1988. He left for Beijing on Nov.
5, 1988 and started to work at the Palace Hotel.
36. Subsequently, Santos signed an amended employment agreement with Palace 42. After this, Santos filed a complaint for illegal dismissal with the Arbitration
Hotel on the same date, Nov. 5, 1988. In the contract, Mr. Shmidt represented Branch, NCR of NLRC
the hotel while MHICL VP for Operations and Development Miguel D. a. He prayed for an award of US$19,923.00 as actual damages, P40k
Cergueda signed the employment agreement under the word “noted” as exemplary damages and atty fees equivalent to 20% of the
37. Come June 8 to 29, 1989: Santos was in the PH on vacation leave; he returned damages prayed for
to China on July 17, 1989 to resume work. b. The complaint named MHC, MHICL, the Palace Hotel and Mr.
38. July 22, 1989: Mr. Shmidt’s Exec Secretary Joanna suggested in a Shmidt (Manila Hotel, et al) as respondents
handwritten note that Santos be given 1 month notice of his release from 43. Labor Arbiter Ceferina Diosana decided the case in favor of Santos. MHC,
employment MHICL, the Palace Hotel and Mr. Shmidt to pay Santos:
a. The Palace Hotel informed Santos of this by letter signed by Mr. a. US$20,820 as unearned salaries
Shmidt b. P50k moral dmg
b. The reason for this was due to the political upheaval going on in c. P40k exemplary dmg
China d. 10% of the total award as atty fees
c. The company made an assurance that it did not reflect in his past 44. Manila Hotel, et al. appealed to the NLRC, arguing that the POEA, not the
performances that led to his dismissal and that they will contact him NLRC had jurisdiction over the case.
directly should a turnaround in the business happen 45. NLRC promulgated a decision in favor of Manila Hotel, et al. and declared
d. CONTEXT: (bonus lang to) The political upheaval refers to the the previous decision null and void; Santos was enjoined to file complaint
Tiannamen Square incidents or known as the June 4th Incident or the with POEA.
Tiananmen Square Massacre. There were student-led 46. Santos filed an MR arguing that the case was not cognizable by POEA as he
demonstrations in Beijing in 1989 as a response to reforms during was not an Overseas Contract Worker
the decade which affected the economy and led to serious inflation, 47. NLRC granted the MR and reversed itself.
to limited preparedness of graduates for the new economy and to a. The NLRC then directed a Labor Arbiter to hear the case to
restrictions on political participation. determine whether Santos was retrenched or dismissed.
48. Labor Arbiter submitted his report and found that Santos was illegally
It led to troops with assault rifles and tanks to fire at the dismissed and recommended that he be paid actual damages equivalent to his
demonstrators who tried to block the military’s advance towards salaries for the unexpired portion of his contract
Tiananmen Square. Deaths were estimated to be near or above 49. NLRC ruled in favor of Santos
10,000. a. US$12,600.00 as salaries for the unexpired portion
39. Thereafter, Santos’ employment was terminated on Sept. 5, 1989 and all b. US$3,600.00 as extra 4 months salaries for the 2 year period of the
benefits due him were paid, including his plane fare back to the PH parties’ contract
40. On Oct. 3, 1989, Santos was repatriated to the PH c. US$3,600.00 as 14th month pay for the aforesaid 2 year contract
41. (IMPT) Santos, through his lawyer Atty. Ednave, wrote to Mr. Shmidt stipulated by the parties for a total of US$19,800.00
demanding full compensation pursuant to the employment agreement d. 4 atty’s fees of 10% total award
a. Mr. Shmidt replied stating that the Palace Hotel did not abruptly 50. MR by Manila Hotel et al was denied. Hence this petition.
terminate him and followed the 1 month notice clause and the fact
that Santos received all benefits due ISSUE/s:
b. In addition, it was stated that the Print Shop at the Palace Hotel is 4. WoN NLRC was a seriously inconvenient forum (forum non conveniens) –
still not operational as they were still trying to control costs YES, the conditions for forum non conveniens were unavailing in this case.
c. “When going through the latest performance ratings, please also be It is hard to see how NLRC is a convenient forum given that all incidents of
advised that his performance was below average and a Chinese the case occurred outside the PH. Considering also that the contract was
National who is doing his job now shows a better approach.” perfected in foreign soil, a decision cannot be made as to the law governing
d. “In closing, when Mr. Santos received the letter of notice, he hardly the employment contract. The NLRC cannot also determine the facts
showed up for work but still enjoyed free considering that all the acts complained of occurred in Beijing, China. And
accommodation/laundry/meals up to the day of his departure.” even assuming NLRC had jurisdiction, it could not bind Palace Hotel for it is
 a corporation incorporated under the laws of China and was not even served in foreign soil. (lex loci contractus/the law of the place where the contract
with the proper summons. was made applies)
5. WoN MHC is liable – NO, though MHC is an incorporator of MHICL and a. Employment contract not perfected in PH
owns 50% of its capital stock, it is not enough to pierce the veil of corporate 20. No power to determine the facts: NLRC cannot determine the facts
fiction between the two entities. (corp related na to so I will skip this part) surrounding the illegal dismissal because all the acts complained of took
6. WoN MHICL is liable – NO, VP Cergueda only signed as a mere witness to place in Beijing, China.
the employement contract and nothing else. Furthermore, there was no a. NLRC was not in a position to determine whether the
existing employer-employee relationship between Santos and MHICL. Tiananmen Square incident truly adversely affected operations
of the Palace Hotel as to justify Santos’ retrenchment.
RULING: WHEREFORE, the Court hereby GRANTS the petition for certiorari and 21. Principle of effectiveness, no power to execute decision: Even assuming
ANNULS NLRC decision. NLRC could properly decide, it would not have any binding effect against
Palace Hotel since it is a corporation incorporated under the laws of
RATIO: China and was not even served with summons.
Forum non conveniens a. Jurisdiction over its person was not acquired.
15. The main aspects of the case transpired in 2 foreign jurisdictions and the case 22. This is not to say that Philippine courts and agencies have no power to solve
involves purely foreign elements. controversies involving foreign employers. Neither are we saying that we do
a. Only link to PH is that Santos is a PH citizen not have power over an employment contract executed in a foreign country.
b. Palace Hotel and MHICL are foreign corporations If Santos were an overseas contract worker, a Philippine forum,
c. Not all cases involving PH citizens can be tried here specifically the POEA, not the NLRC, would protect him. He is not an
16. Employment contract overseas contract worker a fact which he admits with conviction.
a. Santos was directly hired by a foreign employer, Palace Hotel,
through correspondence sent to the Sultanate of Oman, where MHC not liable (not that impt)
Santos was then employed 23. Even assuming NLRC had jurisdiction and that MHICL was liable for
b. He was hired without the intervention of the POEA or any Santos’ retrenchment, MHC cannot be held liable
authorized recruitment agency of the government 24. Though MHC is an incorporator of MHICL and owns 50% of its capital
17. Under the rule of forum non conveniens, a Philippine court or agency may stock, it is not enough to pierce the veil of corporate fiction between the two
assume jurisdiction over the case if it chooses to do so provided: entities. (corp related na to so I will skip this part)
a. that the Philippine court is one to which the parties may
conveniently resort to; MHICL not liable (likewise, not that impt)
b. that the Philippine court is in a position to make an intelligent 25. Santos predicates MHICL’s liability on the fact that MHICL signed his
decision as to the law and the facts; and employment contract with Palace Hotel. Such would fail according to the SC.
c. that the Philippine court has or is likely to have power to enforce its 26. VP Cergueda signed the employment contract as a mere witness (“noted”)
decision a. When one notes a contract, one is not expressing his agreement or
d. The conditions are unavailing in this case approval, as a party would according to jurisprudence (Sichangco v.
18. Not convenient: SC fails to see how NLRC is a convenient forum given that Board of Commissioners of Immigration)
all incidents (from the time of recruitment, to the time of dismissal) occurred b. VP Cergueda merely signed the witnessing part of the document
outside the Philippines which is that part which comes after the recitals or the parties. A
a. This is compounded by the fact that Palace Hotel and MHICL witness is simply one who personally sees or perceives a thing
(respondents in Santos’ complaint) are NOT nationals of the PH (beholder, spectator, or eyewitness)
and NEITHER were they doing business in the PH; the same 27. There was no existing employer-empoyee relationship between Santos and
can be said for Mr. Shmidt and Mr. Henk who are non-residents MHICL. To determine, the ff elements are considered:
of PH a. the selection and engagement of the employee;
19. No power to determine applicable law: An intelligent decision cannot be b. the payment of wages;
made as to the law governing the employment contract as such was perfected c. the power to dismiss; and
 d. the power to control employees conduct
28. MHICL did not have and did not exercise any of the aforementioned powers.
a. It did not select respondent Santos as an employee for the Palace
Hotel. He was referred to the Palace Hotel by his friend, Nestor
Buenio. MHICL did not engage respondent Santos to work.
b. The terms of employment were negotiated and finalized through
correspondence between respondent Santos, Mr. Schmidt and Mr.
Henk, who were officers and representatives of the Palace Hotel and
not MHICL.
c. Neither did respondent Santos adduce any proof that MHICL had
the power to control his conduct.
d. Finally, it was the Palace Hotel, through Mr. Schmidt and not
MHICL that terminated respondent Santos services.
29. There was also no evidence to show that Palace Hotel and MHICL are one
and the same entity.

Grave abuse of discretion on Labor Arbiter

30. The jurisdiction of labor arbiters and the NLRC under Article 217 of the
Labor Code is limited to disputes arising from an employer-employee
relationship which can be resolved by reference to the Labor Code, or other
labor statutes, or their collective bargaining agreements
31. To determine which body has jurisdiction over the present controversy, we
rely on the sound judicial principle that jurisdiction over the subject matter is
conferred by law and is determined by the allegations of the complaint.
32. Considering that there was no employer-employee relationship and that the
lack of jurisdiction was obvious from the allegations of the complaint, the
failure to dismiss amounted to grave abuse of discretion.
 009 PACIFIC CONSULTANTS v. SCHONFELD (Sarmiento) one to which the parties may conveniently resort to; (2) the Philippine Court is in
February 19, 2007 | Callejo, Sr. J | a position to make an intelligent decision as to the law and the facts; and, (3) the
Philippine Court has or is likely to have power to enforce its decision.
PETITIONER: PACIFIC CONSULTANTS INTERNATIONAL ASIA AND
JENS PETER HENRICHSEN DOCTRINE: Philippine Court may assume jurisdiction over the case if it
chooses to do so if the following requisites are met: (1) the Philippine Court is one
RESPONDENTS: KLAUS K SCHONFELD to which the parties may conveniently resort to; (2) the Philippine Court is in a
position to make an intelligent decision as to the law and the facts; and, (3) the
SUMMARY: Philippine Court has or is likely to have power to enforce its decision.

Respondent Schonfeld is a Canadian citizen. (PPI) is a corporation established

with the laws of the Philippines and is a subsidiary of Pacific Consultants FACTS:
International of Japan (PCIJ). PCIJ decided to engage in consultancy services for
water and sanitation in the Philippines. Respondent Schonfeld was employed by 1. Respondent Klaus is a Canadian citizen and was a resident of New
PCIJ as PPI Sector Manager in its Water and Sanitation Department. His salary Westminster, British Columbia, Canada. He had been a consultant in the
was to be paid partly by PPI and PCIJ. Henrichsen sent a letter of employment to field of environmental engineering and water supply and sanitation.
Schonfeld in Canada. The arbitration clause of the contract provides that “any
question of employment, is to be finally settled, binding to both parties through 2. Pacicon Philippines, Inc. (PPI) is a corporation duly established and
written submissions, by the Court of Arbitration in London. Schonfeld received a incorporated in accordance with the laws of the Philippines. The primary
letter from Henrichsen informing him that his employment had been terminated purpose of PPI was to engage in the business of providing specialty and
he filed a Complaint for Illegal Dismissal against petitioners PPI and Henrichsen technical services both in and out of the Philippines.
with the Labor Arbiter. ISSUE: Whether or not the Labor courts of the a. It is a subsidiary of Pacific Consultants International of Japan
Philippines has jurisdiction over the subject matter. YES. The settled rule on (PCIJ).
stipulations regarding venue, in Rule 4 of the Revised Rules of Court is that b. The president of PPI, Jens Peter Henrichsen, who was also the
absence of qualifying or restrictive words. They should be considered merely as director of PCIJ, was based in Tokyo, Japan.
an agreement or additional forum, not as limiting venue to the specified place. c. Henrichsen commuted from Japan to Manila and vice versa, as well
Thus, London is not an exclusive venue for any action. As for PPI’s insistence as in other countries where PCIJ had business.
on the application of the principle of forum non conveniens, the same must be
rejected. The bare fact that Schonfeld is a Canadian citizen and was a repatriate 3. PCIJ decided to engage in consultancy services for water and sanitation in
does NOT warrant the application of the principle for the following reasons: the Philippines. Respondent Klaus was employed by PCIJ, through
(1)The Labor Code of the Philippines does NOT include forum non conveniens Henrichsen, as Sector Manager of PPI in its Water and Sanitation
as a ground for the dismissal of the complaint. Department. However, PCIJ assigned him as PPI sector manager in the
(2)The propriety of dismissing a case based on this principle requires a factual Philippines. His salary was to be paid partly by PPI and PCIJ.
determination; hence, it is properly considered as defense.
(3)the Court held that: Philippine Court may assume jurisdiction over the case if 4. EMPLOYMENT LETTER: Henrichsen transmitted a letter of
it chooses to do so if the following requisites are met: (1) the Philippine Court is 26
employment to respondent in Canada, thereto. Mr. Klaus K. Schonfeld

26 define that part of the present terms and conditions for which Pacicon is responsible. In case of any
Dear Mr. Schonfeld,
discrepancies or contradictions between the present Letter of Employment and the contract with Pacicon
Philippines, Inc. or in the case that Pacicon should not live up to its obligations, this Letter of Employment
In case of any discrepancies or contradictions between this Letter of Employment and the General
will prevail.
Conditions of Employment, this Letter of Employment will prevail.
1. Project Country: The Philippines with possible short-term assignments in other countries.
You will, from the date of commencement, be [“seconded”] to our subsidiary Pacicon Philippines, Inc. in
2. Duty Station: Manila, the Philippines.
Manila, hereinafter referred as Pacicon. Pacicon will provide you with a separate contract, which will
3. Family Status: Married.
 5. ALIEN PERMIT: As required by Rule XIV (Employment of Aliens) of the 8. COMPLAINT: respondent filed a Complaint for Illegal Dismissal against
Omnibus Rules Implementing the Labor Code, PPI applied for an Alien petitioners PPI and Henrichsen with the Labor Arbiter.
Employment Permit (Permit) for respondent before the (DOLE). It appended d. It alleges that: PPI had not notified the DOLE of its decision to close
respondent’s contract of employment to the application. one of its departments, which resulted in his dismissal; and they
a. DOLE granted the application and issued the Permit to respondent. failed to notify him that his employment was terminated.
It reads: Respondent also claimed for separation pay and other unpaid
benefits. He alleged that the company acted in bad faith and
6. Respondent received his compensation from PPI for the following periods: disregarded his rights.
February to June 1998, November to December 1998, and January to August
1999. He was also reimbursed by PPI for the expenses he incurred in 9. MOTION TO DISMISS: Petitioners filed a Motion to Dismiss the
connection with his work as sector manager. complaint on the following grounds:
a. He reported for work in Manila except for occasional assignments i. (1) the Labor Arbiter had no jurisdiction over the subject
abroad, and received instructions from Henrichsen. matter; and
ii. (2) venue was improperly laid.
7. TERMINATED: Respondent received a letter from Henrichsen informing a. It averred that respondent was a Canadian citizen, a transient
him that his employment had been terminated for the reason that PCIJ and expatriate who had left the Philippines. He was employed and
PPI had not been successful in the water and sanitation sector in the dismissed by PCIJ, a foreign corporation with principal office in
Philippines. However, Henrichsen, requested respondent to stay put in his job Tokyo, Japan.
after August 5, 1999, until such time that he would be able to report on certain a. Since respondent’s cause of action was based on his letter
projects and discuss all the opportunities he had developed. Respondent of employment executed in Tokyo, Japan, under the
continued his work with PPI until the end of business hours on October 1, principle of lex loci contractus, the complaint should have
1999. been filed in Tokyo, Japan.
b. Respondent filed with PPI several money claims, including unpaid b. Petitioners PPI claimed that respondent did not offer any
salary, leave pay, air fare from Manila to Canada, and cost of justification for filing his complaint against PPI before the
shipment of goods to Canada. NLRC in the Philippines.
c. PPI partially settled some of his claims (US$5,635.99), but refused c. Moreover, under Section 12 of the General Conditions of
to pay the rest. Employment appended to the letter of employment,

4. Position:
Sector Manager, Water and Sanitation. Yours sincerely,
Pacific Consultants International
5. Commencement: 1st October 1997.
6. Remuneration: Jens Peter Henrichsen
US$7,000.00 per month. The amount will be paid partly as a local salary (US$2,100.00 per month) by
Pacicon and partly as an offshore salary (US$4,900.00) by PCI to bank accounts to be nominated by you. Section 21 of the General Conditions of Employment appended to the letter of employment reads:
21 Arbitration
A performance related component corresponding to 17.6% of the total annual remuneration, subject to
satisfactory performance against agreed tasks and targets, paid offshore. Any question of interpretation, understanding or fulfillment of the conditions of employment, as well as
any question arising between the Employee and the Company which is in consequence of or
7. Accommodation: The company will provide partly furnished accommodation to a rent including connected with his employment with the Company and which can not be settled amicably, is to be
association fees, taxes and VAT not exceeding the Pesos equivalent of US$2,900.00 per month. finally settled, binding to both parties through written submissions, by the Court of Arbitration in
8. Transportation: Included for in the remuneration. London.
9. Leave Travels: You are entitled to two leave travels per year. Respondent arrived in the Philippines and assumed his position as PPI Sector Manager. He was accorded
10. Shipment of Personal Effects: The maximum allowance is US$4,000.00. the status of a resident alien.
11. Mobilization Travel: Mobilization travel will be from New Westminster, B.C., Canada.

This letter is send (sic) to you in duplicate; we kindly request you to sign and return one copy to us.
 complainant and PCIJ had agreed that any employment- b. He emphasized that as gleaned from Alien Employment Permit
related dispute should be brought before the London issued to him by DOLE, he is an employee of PPI.
Court of Arbitration. Since even the Supreme Court had c. It was PPI president Henrichsen who terminated his employment;
already ruled that such an agreement on venue is valid, PPI also paid his salary and reimbursed his expenses related to
Philippine courts have no jurisdiction. transactions abroad. That PPI is a wholly-owned subsidiary of PCIJ
is of no moment because the two corporations have separate and
10. Respondent opposed the Motion, contending that he was employed by distinct personalities.
PPI to work in the Philippines under contract separate from his January
7, 1998 contract of employment with PCIJ. 2. Petitioners PPI contend that it was the PCIJ which employed respondent as
e. He insisted that his employer was PPI, a Philippine-registered an employee; it merely seconded him to petitioner PPI in the Philippines, and
corporation; it is inconsequential that PPI is a wholly-owned assigned him to work in Manila as Sector Manager. Petitioner PPI, being a
subsidiary of PCIJ because the two corporations have separate and wholly-owned subsidiary of PCIJ, was never the employer of respondent.
distinct personalities; and he received orders and instructions from a. Petitioners further contend that, although Henrichsen was both a
Henrichsen who was the president of PPI. director of PCIJ and president of PPI, it was he who signed the
f. He further insisted that the principles of forum non conveniens and termination letter of respondent upon instructions of PCIJ.
lex loci contractus do not apply, and that although he is a Canadian b. Petitioners further assert that all work instructions came from PCIJ
citizen, Philippine Labor Laws apply in this case. and that petitioner PPI only served as a “conduit.”
c. There being no evidence that petitioner PPI is the employer of
11. According to respondent, the material allegations of the complaint, not respondent, the Labor Arbiter has no jurisdiction over respondent’s
petitioners’ defenses, determine which quasi-judicial body has jurisdiction. complaint.
Section 21 of the Arbitration Clause in the General Conditions of
Employment does not provide for an exclusive venue where the complaint 3. Petitioners aver that since respondent is a Canadian citizen, the CA erred in
against PPI for violation of the Philippine Labor Laws may be filed. ignoring their claim that the principlesof forum non conveniens and lex loci
g. Respondent Klaus pointed out that PPI had adopted two inconsistent contractus are applicable.
positions: it was first alleged that he should have filed his complaint a. They also point out that the principal office, officers and staff of
in Tokyo, Japan; and it later insisted that the complaint should have PCIJ are stationed in Tokyo, Japan; and the contract of employment
been filed in the London Court of Arbitration. of respondent was executed in Tokyo, Japan.
b. Moreover, under Section 21 of the General Conditions for
12. LA: rendered a decision granting petitioner’s Motion to dismiss. Employment, the dispute between respondent and PCIJ should be
settled by the court of arbitration of London. Petitioners claim that
ISSUE: Whether or not Labor court of the Philippines is the proper forum for the words used therein are sufficient to show the exclusive and
the labor dispute—YES. The mere fact that Klaus was a Canadian would not restrictive nature of the stipulation on venue.
preclude the labor arbiter from taking cognizance of the case c. Petitioners insist that the U.S. Labor-Management Act applies only
to U.S. workers and employers, while the Labor Code of the
RULING: WHEREFORE, the petition is DENIED. The Decision of the Court of Philippines applies only to Filipino employers and Philippine-based
Appeals in CA-G.R. SP No. 76563 is AFFIRMED. This case is REMANDED to the employers and their employees, not to PCIJ.
Labor Arbiter for disposition of the case on the merits. Cost against petitioners. d. In fine, the jurisdictions of the NLRC and Labor Arbiter do not
extend to foreign workers who executed employment agreements
RATIO: with foreign employers abroad, although “seconded” to the
Philippines.
1. Respondent Klaus averred that the absence or existence of a written contract
of employment is not decisive of whether he is an employee of PPI.
a. He maintained that PPI, through its president Henrichsen, directed 4. The petition is denied for lack of merit.
his work/duties as Sector Manager of PPI
 a. Inexplicably, the Labor Arbiter and the NLRC ignored the at the place where the contract of employment was signed, in London as
documentary evidence which respondent appended to his pleadings stated in their contract. By enumerating possible venues where respondent
showing that he was an employee of petitioner PPI; they merely could have filed his complaint, however, petitioners themselves admitted that
focused on the January 7, 1998 letter of employment and Section 21 the provision on venue in the employment contract is indeed merely
of the General Conditions of Employment. permissive.
b. Petitioner PPI applied for the issuance of an AEP to respondent a. Petitioners’ insistence on the application of the principle of forum
before the DOLE. In said application, PPI averred that respondent non conveniens must be rejected. The bare fact that respondent
is its employee. is a Canadian citizen and was a repatriate does not warrant the
application of the principle for the following reasons:
5. EMPLOYER-EMPLOYEE RELATIONSHIP: Thus, as claimed by b. First. The Labor Code of the Philippines does not include forum
respondent, he had an employment contract with petitioner PPI; otherwise, non conveniens as a ground for the dismissal of the complaint.
petitioner PPI would not have filed an application for a Permit with the c. Second. The propriety of dismissing a case based on this
DOLE. Petitioners are thus estopped from alleging that the PCIJ, not principle requires a factual determination; hence, it is properly
petitioner PPI, had been the employer of respondent all along. considered as defense.
a. CASE: the power to control and supervise petitioner’s work d. Third. this Court held that:
performance devolved upon the respondent company. i. Philippine Court may assume jurisdiction over the case
i. Likewise, the power to terminate the employment if it chooses to do so; provided, that the following
relationship was exercised by the President of the requisites are met:
respondent company. It is not the letterhead used by the (1) that the Philippine Court is one to which
company in the termination letter which controls, but the the parties may conveniently resort to;
person who exercised the power to terminate the (2) that the Philippine Court is in a position to
employee. It is also inconsequential if the second letter of make an intelligent decision as to the law and
employment executed in the Philippines was not signed by the facts; and,
the petitioner. (3) that the Philippine Court has or is likely to
have power to enforce its decision. x x x.
6. The settled rule on stipulations regarding venue, as held by this Court in the Admittedly, all the foregoing requisites are present in this case.
vintage case of Philippine Banking Corporation v. Tensuan, is that while they
are considered valid and enforceable, venue stipulations in a contract do not,
as a rule, supersede the general rule set forth in Rule 4 of the Revised Rules
of Court in the absence of qualifying or restrictive words. They should be
considered merely as an agreement or additional forum, not as limiting venue
to the specified place. They are not exclusive but, rather permissive. If the
intention of the parties were to restrict venue, there must be accompanying
language clearly and categorically expressing their purpose and design that
actions between them be litigated only at the place named by them.
a. no restrictive words like “only,” “solely,” “exclusively in this
court,” “in no other court save —,” “particularly,” “nowhere else
but/except —,” or words of equal import were stated in the contract.
b. It cannot be said that the court of arbitration in London is an
exclusive venue to bring forth any complaint arising out of the
employment contract.

7. Petitioners PPI contend that respondent should have filed his Complaint in
his place of permanent residence, or where the PCIJ holds its principal office,
 010 AZNAR v. CHRISTENSEN-GARCIA (SIAPNO) Philippines where he became a domiciliary until the time of his death.
January 31, 1963 | Labrador, J. | Renvoi Doctrine However, during the entire period of his residence in this country, he had
always considered himself a citizen of California.
PETITIONER: IN THE MATTER OF THE TESTATE ESTATE OF 2. In his will, Edward instituted his daughter Maria Lucy Christensen as his
EDWARD E. CHRISTENSEN, DECEASED. ADOLFO C. AZNAR, Executor only heir, but left a legacy of P3600 in favor of Helen Christensen Garcia
and LUCY CHRISTENSEN, Heir of the deceased who, in his will was described as "not in any way related to" him.
RESPONDENTS: HELEN CHRISTENSEN GARCIA 3. It is in accordance with the above-quoted provisions that the executor in his
final account and project of partition ratified the payment of only P3,600 to
SUMMARY: Edward Christensen was born in New York but he migrated to Helen Christensen Garcia and proposed that the residue of the estate be
California where he resided for a period of 9 years. He came to the Philippines transferred to his daughter, Maria Lucy Christensen.
where he became a domiciliary until his death. In his will, he declared to have 4. But in a separate decision, the Supreme Court declared Helen as an
only one child (natural daughter) Maria Lucy Christensen as his only heir. acknowledged natural daughter of Edward. Thus, Helen alleged The legal
However, he left a sum of money in favor of Helen Christensen Garcia, an grounds of opposition are (a) that the distribution should be governed by the
acknowledged natural child, though not in any way related to the deceased. laws of the Philippines, and (b) that said order of distribution is contrary
Helen claims that under Article 16 of the Civil Code, California law should be thereto insofar as it denies to Helen Christensen, one of two acknowledged
applied. However, Article 946 of the Civil Code of California states that “If natural children, one-half of the estate in full ownership.
there is no law to the contrary, in the place where personal property is situated, 5. She claims that under Art. 16 of the Civil Code, the California law should be
it is deemed to follow the person of its owner, and is governed by the law of his applied, and the question of the validity of the testamentary provision should
domicile.” ISSUE: Whether or not the national law of the deceased should be thus be referred back to the law of the decedent’s domicile, which is the
applied in determining the successional rights of his heirs - Yes. Article 16 of Philippines.
the Civil Code states that successional rights are determined by the national law 6. She invokes the provisions of Article 946 of the Civil Code of California,
of the country where the deceased is a citizen hence the internal law of which is as follows: “If there is no law to the contrary, in the place where
California. Said internal law distinguishes the rule to be applied to Californians personal property is situated, it is deemed to follow the person of its owner,
domiciled in California and for Californians domiciled outside of California. and is governed by the law of his domicile.” Accordingly, her share must be
For Californians residing in other jurisdiction, the law of said country must increased in view of successional rights of illegitimate children under
apply. Edward Christensen being domiciled in the Philippines, the law of his Philippine laws.
domicile must be followed. The case was remanded to the lower court for 7. On the other hand, the executor and Lucy argue that the national law of the
further proceedings – the determination of the successional rights under deceased must apply, and thus the courts must apply internal law of
Philippine law only. The conflicts of law rule in CA (Art. 946) authorize the California on the matter. Under California law, there are no compulsory heirs
return of question of law to the testator’s domicile. The court must apply its own and consequently a testator may dispose of his property by will in the form
rule in the Philippines as directed in the conflicts of law rule in CA, otherwise and manner he desires (Kaufman)
the case/issue will not be resolved if the issue is referred back and forth between
2 states. ISSUE/s: W/N Philippine law should ultimately be applied? YES, PH law should
apply because the California law allows it for Californians with domicile outside the
DOCTRINE: The recognition of the renvoi theory implies that the rules of the State
conflict of laws are to be understood as incorporating not only the ordinary or
internal law of the foreign state or country, but its rules of the conflict of laws as
well. RULING: WHEREFORE, the decision appealed from is hereby reversed and the case
returned to the lower court with instructions that the partition be made as the Philippine
law on succession provides. Judgment reversed, with costs against appellees

FACTS:
RATIO:
1. Edward Christensen, born in New York, migrated to California where he Edward was a US Citizen but is a domicile in the Philippines at the time of his death
resided and consequently was considered citizen thereof. He came to the
 1. In arriving at the conclusion that the domicile of the deceased is the its own intended and appropriate sphere, the principle cited in Kaufman
Philippines, SC was persuaded by the fact that he was born in New York, should apply to citizens living in the State, but Article 946 should apply
migrated to California and resided there for nine years, and since he came to to such of its citizens as are not domiciled in California but in other
the Philippines in 1913 he returned to California very rarely and only for short jurisdictions.
visits (perhaps to relatives), and considering that he appears never to have 8. The national law mentioned in Article 16 of our Civil Code is the law on
owned or acquired a home or properties in that state, which would indicate conflict of laws in the California Civil Code, i.e., Article 946, which
that he would ultimately abandon the Philippines and make home in the State authorizes the reference or return of the question to the law of the
of California. testator's domicile. The conflict of laws rule in California, Article 946, Civil
2. Residence is a term used with many shades of meaning from mere temporary Code, precisely refers back the case, when a decedent is not domiciled in
presence to the most permanent abode. Generally, however, it is used to
California, to the law of his domicile, which is the Philippines in the case
denote something more than mere physical presence. (Sec. 16, Goodrich on
at bar.
Conflict of Laws)
9. The Philippine court therefore must apply its own law as directed in the
3. As to his citizenship, however, SC found that the citizenship that he acquired
in California when he resided in Sacramento, California from 1904 to 1913, conflict of laws rule of the state of the decedent.
was never lost by his stay in the Philippines, for the latter was a territory of 10. RENVOI DOCTRINE:
the United States (not a state) until 1946 and the deceased appears to have a. Assume (1) that this question arises in a Massachusetts court. There the rule
considered himself as a citizen of California by the fact that when he executed of the conflict of laws as to intestate succession to movables calls for an
his will in 1951 he declared that he was a citizen of that State; so that he application of the law of the deceased's last domicile. Since by hypothesis X's
appears never to have intended to abandon his California citizenship by last domicile was France, the natural thing for the Massachusetts court to do
acquiring another. would be to turn to French statute of distributions, or whatever corresponds
thereto in French law, and decree a distribution accordingly. An examination
Philippine law governs of French law, however, would show that if a French court were called upon
4. The law that governs the validity of his testamentary dispositions is defined to determine how this property should be distributed, it would refer the
in Article 16 of the Civil Code of the Philippines, which is as follows: distribution to the national law of the deceased, thus applying the
ART. 16. Real property as well as personal property is subject to the law of Massachusetts statute of distributions. So on the surface of things the
the country where it is situated. Massachusetts court has open to it alternative course of action: (a) either to
5. There is no single American law governing the validity of testamentary apply the French law is to intestate succession, or (b) to resolve itself into a
provisions in the United States, each state of the Union having its own private French court and apply the Massachusetts statute of distributions, on the
law applicable to its citizens only and in force only within the state. The assumption that this is what a French court would do. If it accepts the so-
“national law” indicated in Article 16 of the Civil Code above quoted can not, called renvoi doctrine, it will follow the latter course, thus applying its own
therefore, possibly mean or apply to any general American law. So it can refer law. This is one type of renvoi. A jural matter is presented which the conflict-
to no other than the private law of the State of California. of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of
6. However, intestate and testamentary successions, both with respect to the which, in turn, refers the matter back again to the law of the forum. This is
order of succession and to the amount of successional rights and to the renvoi in the narrower sense. The German term for this judicial process is
intrinsic validity of testamentary provisions, shall be regulated by the 'Ruckverweisung.'
national law of the person whose succession is under consideration, b. Another theory, known as the "doctrine of renvoi", has been advanced. The
whatever may be the nature of the property and regardless of the country theory of the doctrine of renvoi is that the court of the forum, in determining
where said property may be found. the question before it, must take into account the whole law of the other
7. The laws of California have prescribed two sets of laws for its citizens, one jurisdiction, but also its rules as to conflict of laws, and then apply the law to
for residents therein and another for those domiciled in other jurisdictions. the actual question which the rules of the other jurisdiction prescribe. This
Article 946 of the California Civil Code is its conflict of laws rule, while may be the law of the forum.
the rule applied in Kaufman, is its internal law. If the law on succession 11. The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs.
and the conflict of laws rules of California are to be enforced jointly, each in Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton
vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.)
cited by appellees to support the decision can not possibly apply in the case
at bar, for two important reasons, i.e., the subject in each case does not appear
to be a citizen of a state in the United States but with domicile in the
Philippines, and it does not appear in each case that there exists in the state
of which the subject is a citizen, a law similar to or identical with Art. 946 of
the California Civil Code.
 011 CADALIN v. POEA ADMINISTRATOR (Arcenas edited by
TIMBOL) Doctrine: The parties to a contract may select the law by which it is to be
December 5, 1994 | Quiason, J. | Which/what law the assuming court will apply governed. In such a case, the foreign law is adopted as a "system" to regulate the
relations of the parties, including questions of their capacity to enter into the
G.R. No. L-104776 December 5, 1994 contract, the formalities to be observed by them, matters of performance, and so
PETITIONERS: Bienvenido M. Cadalin, Rolando M. Amul, Donato B. Evangelista, And The Rest Of forth
1,767 Named-Complainants, Thru And By Their Attorney-In-Fact, Atty. Gerardo A. Del Mundo d/n: Procedure heavy case bc it took a decade to decide it. NLRC: We have taken painstaking efforts to
RESPONDENTS: POEA, NLRC , Brown & Root International, Inc. (BRII) And/Or Asia International sift over the more than fifty volumes now comprising the records of these cases. So, laban lang.
Builders Corporation (AIBC)
G.R. Nos. 104911-14 December 5, 1994
FACTS:
PETITIONER: Bienvenido M. Cadalin, Et Al. 22. Cadalin et al allege that they were recruited by AIBC for its accredited foreign
RESPONDENTS: NLRC, BRII and AIBC principal, BRII27, on various dates from 1975 to 1983.
G.R. Nos. 105029-32 December 5, 1994 a. They were all deployed at various projects undertaken by BRII in
PETITIONERS: Asia International Builder Corporation And Brown & Root International, Inc.,
RESPONDENTS: NLRC, Bienvenido M. Cadalin (et al – super dami nila 1k +)
several countries in the Middle East (Saudi Arabia, Libya, United
Arab Emirates and Bahrain) as well as in Southeast Asia, in
Summary: Cadalin and the other claimants, in their own behalf and on behalf of Indonesia and Malaysia.
728 other overseas contract workers (OCWs) instituted a class suit by filing an b. Having been officially processed as overseas contract workers by
“Amended Complaint” with the POEA for money claims arising from their the Government, all the individual complainants signed standard
recruitment by AIBC and employment by BRII. The OCWs were recruited by overseas employment contracts with AIBC before their departure
AIBC for its accredited foreign principal, Brown & Root. Having been officially from the Philippines.
processed as overseas contract workers by the Philippine Government, all the 23. In Bahrain, where some of the complainants were deployed, His Majesty Isa
individual claimants signed standard overseas employment contracts. The amended Bin Salman Al Kaifa, Amir of Bahrain, issued Amiri Decree No. 23 on June
complaint principally sought the payment of the unexpired portion of the 16, 1976 (See end of digest for relevant provisions regarding OFWs)
employment contracts, which was terminated prematurely. In the State of Bahrain, 24. These are consolidated cases where Bienvenido Cadalin, Rolando Amul and
where some of the individual claimants were deployed, the Amiri Decree No. 23 Donato Evangelista, in their own behalf and on behalf of 728 other OFWs
(Labour Law for the Private Sector), came into effect, wherein provisions relevant (Cadalin et al), instituted a class suit against the POEA by filing an Amended
to the claims of the Cadalin et al are as follows: (see last page of digest) in essence, Complaint for money claims28 against AIBC and BRII.
increased pay, conditions of work, leaves, and indemnities. a. The claimants were represented by Atty. Gerardo del Mundo.
25. Oct 19 ‘84 – Cadalin et al filed their Compliance to the Order and an Urgent
Hence the issue before the Court. Whether or not the claimants in Bahrain are Manifestation praying to direct parties to file their position papers and to
entitled to the provisions of the Amiri Decree. subsequently submit the case for decision. AIBC asked for an extension
26. Nov 6 ’84 filed another extension, which was GRANTED.
The SC held in the affirmative. The parties to a contract may select the law by 27. Feb 27 ‘85– AIBC and BRII appealed to NLRC seeking reversal of order of
which it is to be governed. In such a case, the foreign law is adopted as a “system” POEA Admin. Cadalin et al opposed the appeal saying it was dilatory and
to regulate the relations of the parties. Instead of adopting the whole foreign law, prayed the companies be declared in default.
the parties may agree to specific provisions of a foreign statute and shall be deemed 28. September 19 ’85 – NLRC enjoined POEA Admin from hearing the labor
incorporated into their contract “as a set of terms.” It does not become a foreign cases and suspended the period for filing of answers of AIBC and BRII.
contract governed by the foreign law, but operates as contractual terms deemed 29. Dec 12 ‘86 – NLRC dismissed the two appeals filed by AIBC and BRII.
written in the contract. 30. June 19 ‘87 – AIBC submitted its answer to the complaint

27
BRII is a foreign corporation with headquarters in Houston, Texas, and is engaged in construction; and salary differential pay; fringe benefits; refund of SSS and premium not remitted to the SSS; refund of
while AIBC is a domestic corporation licensed as a service contractor to recruit, mobilize and deploy withholding tax not remitted to the BIR; penalties for committing prohibited practices; as well as the
Filipino workers for overseas employment on behalf of its foreign principals. suspension of the license of AIBC and the accreditation of BRII
28
Prayed for the payment of the unexpired portion of the employment contracts (for premature termination)
and interest of the earnings of the Travel and Reserved Fund, interest on all the unpaid benefits; area wage
 31. June 24 – Cadalin et al filed their Urgent Motion to Strike Out Answer rules, affirmed the action of the POEA staggering amount of the claims (more
alleging that the Answer was filed out of time. Admin than US$50,000,000.00) and the
32. Oct 26 ‘88 – Cadalin et al submitted their ex parte manifestation motion complicated issues raised by the parties,
and counter-supplemental motion, together with 446 employment the ten-day rule to answer was not fair
contracts and service records. and reasonable
33. Oct 27 – Companies filed a consolidated reply TIMELY ANSWER AND DEFAULT
34. January 30 ’89 – POEA Admin rendered a decision awarding USD 826, (G.R. No. 104776) AIBC and BRII They failed to refute NLRC's finding
652.44 in favor of only 324 claimants. should be declared in default and should that there was no common or general
35. Feb 10 ’89– The other claimants submitted an Appeal memorandum for have rendered summary judgment on interest in the subject matter of the
partial appeal – AIBC also filed a MR and Notice of Appeal the basis of the pleadings and evidence controversy — which was the
36. Feb 17 ’89– Other claimants filed their Answer to appeal praying for submitted by them applicability of the Amiri Decree No. 23
dismissal of appeal of the companies. and the nature of the claims varied,
37. March 15 ’89– Cadalin et al filed their Supplement to complainants’ appeal (salaries of the unexpired portion while
memorandum plus thei newly discovered evidence (payroll records). others were pure money claims)
38. April 5 – the companies submitted to NLRC their Manifestation stating that PRESCRIPTION PERIOD
there were only 728 named claimants; later filed their counter-manifestation (G.R. No. 104776) that the prescriptive that the prescriptive period for filing the
alleging there were 1,767 of them. period for the filing of the claims is ten claims is Article 291 of LC (three years)
39. Apr 21 ’90 – They filed their manifestational motion praying all 1,767 years (CC), not three years (LC); (G.R. and not Article 1144 of the CC (ten
claimants be awarded their monetary claims for failure of the companies Nos. 104911-14) hence NLRC years)
to file their answers within the reglementary period. committed GAD in applying 3 years.
40. Sept 21 ‘91– NLRC promulgated its resolution modifying the POEA They assert that their claims are
decision: based on the violation of their
a. 94 complainants dismissed due to prescription employment contracts, as amended
b. AIBC and BRII ordered to pay in pesos jointly and severally 149 by the Amiri Decree No. 23 of 1976
complainants, but not including overtime work and those indicated and therefore the claims may be
for lack of evidence brought within ten years as provided
c. Not to pay 19 complainants who appear to have worked elsewhere by Article 1144 of the CC
than in Bahrain. COMPUTATION OF OVERTIME PAY
41. Nov 27 ‘91– Amado 12 others filed a petition for certiorari with SC but was (G.R. Nos. 104911-14) denied the their BRII and AIBC claimed that they were
dismissed and NLRC denied all 3 appeals. formula based on an average overtime not bound by the same, because such
42. HENCE, THIS PETITION BEFORE THE SC. Cadalin et al submitted pay of three hours a day which was memorandum was proposed by a
compromise agreements for SC approval and jointly moved for dismissal of proposed by BRII itself during the subordinate Bahrain official and there
petitions, insofar as it concerns those who signed the quitclaims. (summary negotiation for an amicable settlement was no showing that it was approved by
below) in Bahrain as shown in the the Bahrain Minister of Labor – cannot
Cadalin et al’s Allegations AIBC & BRII’s Comment Memorandum of the Ministry of Labor be used as admission by it.
ON SPEEDY DISPOSITION of Bahrain
(G.R. No. 104776) deprived by NLRC Cannot be faulted for delay, considering
and the POEA of their right to a speedy the volume of 1,500 claimants, it was ISSUE/s: W/N NLRC committed GAD in applying the three-year prescriptive
disposition of their cases because POEA impossible to prepare the answers within period under the LC, instead of the 10-year period under CC – LABOR CODE
Administrator allowed AIBC and BRII the ten-day period provided in the APPLIES. Procedural matters, such as service of process, joinder of actions, period
to file their answers in two years (on NLRC Rules, and that when the motion and requisites for appeal, and so forth, are governed by the laws of the forum. This is
June 19, 1987) after the filing of the to declare AIBC in default was filed on true even if the action is based upon a foreign substantive law. However, such
original complaint (on April 2, 1985) July 19, 1987, said party had already characterization becomes irrelevant if the law of the forum provides for a borrowing
and NLRC, in total disregard of its own filed its answer, and that considering the
statute, which is Section 48 in this case. But Section 48 was not applied because it 10. First to be determined is whether it is the Bahrain law on prescription of action
would contravene the public policy on the protection of labor. Hence, PH law applies based on the Amiri Decree No. 2330 of 1976 or a Philippine law on prescription
and under our labor laws, Article 291 of the LC provides the prescriptive period for that shall be the governing law.
filing "money claims arising from employer-employee relations." The claims in the 11. GENERAL RULE: a foreign procedural law will not be applied in the forum.
cases at bench all arose from the employer-employee relations, which is broader in a. Procedural matters, such as service of process, joinder of actions,
scope than claims arising from a specific law or from the collective bargaining period and requisites for appeal, and so forth, are governed by the
agreement. That the 3-year prescriptive period applies only to money claims does not laws of the forum. This is true even if the action is based upon a foreign
find support the plain language of the provision. substantive law .
b. A law on prescription of actions is sui generis in Conflict of Laws in the
RULING: We find no such abuse of discretion. WHEREFORE, all the three sense that it may be viewed either as procedural or substantive,
petitions are DISMISSED. depending on the characterization given such a law.
c. However, the characterization of a statute into a procedural or
RATIO: substantive law becomes irrelevant when the country of the forum
8. For POEA Administrator – prescription was ten years (Article 1144 CC)29. Why has a borrowing statute31 which treats the foreign statute of limitation
CC? These money claims (under Article 291 of the Labor Code) refer to those as one of substance.
arising from the employer's violation of the employee's right as provided by the d. While there are several kinds of "borrowing statutes," one form provides
Labor Code. Here, what was violated are not the rights of the workers as provided that an action barred by the laws of the place where it accrued, will
by the Labor Code, but the provisions of the Amiri Decree No. 23 issued in not be enforced in the forum even though the local statute has not
Bahrain, which ipso facto amended the worker's contracts of employment. run against it.
9. For NLRC, prescription should be three years (Article 291 LC) which provides 12. Section 48 of our Code of Civil Procedure is of this kind, which provides: If
that all money claims arising from employer-employee relations shall be filed by the laws of the state or country where the cause of action arose, the action
within three years from the time the cause of action accrued; otherwise they shall is barred, it is ALSO barred in the Philippines Islands.
be forever barred a. Section 48 was not repealed or amended by the CC. BUT, under the 1987
a. The 3-year prescriptive period should be applied from the date of Constitution, Section 48 cannot be enforced ex proprio vigore insofar
repatriation of each individual complainant, since the case was filed in as it ordains the application in this jurisdiction of Section 156 of the
the PH. Amiri Decree No. 23 of 1976 because the 1-year prescriptive period
b. ON THE AMIRI DECREE - its the applicability was one of would contravene the public policy on the protection to labor.32
characterization, i.e., whether to characterize the foreign law on
prescription or statute of limitation as "substantive" or "procedural." LABOR CODE APPLICABLE LAW ON PRESCRIPTION
c. In Bournias v. Atlantic Maritime where the issue was the applicability of 13. Having determined that the applicable law on prescription is the Philippine law,
the Panama Labor Code in a case filed in the State of New York for the next question is whether the prescriptive period governing the filing of the
claims arising from said Code. In said case, the claims would have claims is three years, as provided by the Labor Code or ten years, as provided by
prescribed under the Panamanian Law but not under the Statute of the Civil Code of the Philippines.
Limitations of New York. The U.S. Circuit CA held that the Panamanian 14. Section 7-a of the Eight-Hour Labor Law provides the prescriptive period for
Law was procedural as it was not "specifically intended to be filing "actions to enforce any cause of action under said law, and not CBA or any
substantive," hence, the prescriptive period provided in the law of the other contract. On the other hand, Article 291 of the LC provides the prescriptive
forum should apply (i.e. follow US Law) period for filing "money claims arising from employer-employee relations."

CHOICE OF FORUM – PH LAW APPLIES

29 31
Art. 1144. The following actions may be brought within ten years from the time the cause of action A "borrowing statute" directs the state of the forum to apply the foreign statute of limitations to the
accrues: (1) Upon a written contract; (2) Upon an obligation created by law; pending claims based on a foreign law
30 32
Article 156 of the Amiri Decree No. 23 of 1976 provides: A claim arising out of a contract of Article 2, Sections 10 and 18; Article 13, Section 3.
employment shall not be actionable after the lapse of one year from the date of the expiry of the contract.
 a. The claims in the cases at bench all arose from the employer-employee to them under the Rules of Court is to be allowed to join as plaintiffs
relations, which is broader in scope than claims arising from a in one complaint (Revised Rules of Court, Rule 3, § 6).
specific law or from the collective bargaining agreement. 4. The Court is extra-cautious in allowing class suits because they are the exceptions
b. That the 3-year prescriptive period applies only to money claims to the condition sine qua non, requiring the joinder of all indispensable parties.
does not find support the plain language of the provision.

ON SPEEDY DISPOSITION Computing for overtime payment – Memorandum is admissible as evidence

5. It is true that the constitutional right to "a speedy disposition of cases" is not 2. While said memorandum was presented to the POEA without observing the
limited to the accused in criminal proceedings but extends to all parties in all rule on presenting official documents of a foreign government as provided in
cases, including civil and administrative cases, and in all proceedings, including Section 24, Rule 132 of the 1989 Revised Rules on Evidence, it can be
judicial and quasi-judicial hearings. Hence, under the Constitution, any party to a admitted in evidence in proceedings before an administrative body.
case may demand expeditious action on all officials who are tasked with the a. The opposing parties have a copy of the said memorandum, and they
administration of justice could easily verify its authenticity and accuracy.
6. BUT "speedy disposition of cases" is a relative term, a flexible concept. It is b. The admissibility of the offer of compromise made by BRII as
consistent with delays and depends upon the circumstances of each case. What contained in the memorandum is another matter. Under Section 27,
the Constitution prohibits are unreasonable, arbitrary and oppressive delays which Rule 130 of the 1989 Revised Rules on Evidence, an offer to settle
render rights nugatory. a claim is not an admission that anything is due.34
7. Caballero laid down the factors taken into consideration in determining whether
or not the right to a "speedy disposition of cases" has been violated: length of APPLYING AMIRI DECREE (FOREIGN LAW) AS CHOICE OF LAW
delay, reason for the delay, assertion of the right or failure to assert it, and (RELEVANT)
prejudice caused by the delay 5. NLRC applied the Amiri Decree No. 23 of 1976, which provides for
8. APPLICATION: This case is not a run-of-the-mill variety sucht that the 7-year greater benefits than those stipulated in the overseas-employment
deliberation and final disposition cannot be said to be attended by unreasonable, contracts of the claimants. It was of the belief that "where the laws of the
arbitrary or oppressive delays i.e. due to the uniqueness of cicrumstances, there is host country are more favorable and beneficial to the workers, then the
no violation of speedy disposition. Before an intelligent answer could be filed in laws of the host country shall form part of the overseas employment
response to the complaint33. contract
Not a class suit a. It quoted with approval the observation of the POEA
3. NLRC and the POEA Administrator are correct in their stance that inasmuch as Administrator that “xxx in labor proceedings, all doubts in the
the first requirement of a class suit is not present (common or general interest implementation of the provisions of the Labor Code and its
based on the Amiri Decree of the State of Bahrain), it is only logical that only implementing regulations shall be resolved in favor of labor”
those who worked in Bahrain shall be entitled to file their claims in a class suit. 6. The overseas-employment contracts, which were prepared by AIBC and BRII
a. Each claimant was only interested in their own claims and even themselves, provided that the laws of the host country became applicable to
abandoned their co-claimants and entered into separate compromise said contracts if they offer terms and conditions more favorable than those
agreements. stipulated therein
b. The concept of “class suit” is that plaintiffs are brought on the record and 7. Applying the following legal precepts, SC held that the overseas-
must fairly represent and protect the interest of the others. employment contracts in question adopt the provisions of the Amiri
c. SC held that those who worked in Bahrain can not be allowed to sue Decree No. 23 of 1976 as part and parcel.
in a class suit in a judicial proceeding. The most that can be accorded

33
the records of employment of the more than 1,700 claimants had to be retrieved from various countries by various appeals; parties and lawyers alike delayed in terminating the proceedings by squabbling and
in the Middle East. Some of the records dated as far back as 1975; monetary claims were numerous and of constant change of counsel etc
34
various legal bases; insufficient definiteness aand clarity of facts in the complaint making it hard to file an Offer of compromise not admissible. — In civil cases, an offer of compromise is not an admission of
answer to each complaint filed against the companies; hearings on the merits were consistently interrupted any liability, and is not admissible in evidence against the offeror.
 a. Article 1377 of the Civil Code35 – Any ambiguity in the overseas-
Art. 107: A contract of employment made for a period of indefinite duration may be terminated by either
employment contracts should be interpreted against AIBC and
party thereto after giving the other party thirty days' prior notice before such termination, in writing, in
BRII, the parties that drafted it – The contracts were prepared by respect of monthly paid workers and fifteen days' notice in respect of other workers. The party terminating
AIBC and BRII themselves, which contained that the laws of the a contract without giving the required notice shall pay to the other party compensation equivalent to the
host country would apply to the contracts if they offer terms and amount of wages payable to the worker for the period of such notice or the unexpired portion thereof.
conditions more favorable than those stipulated: "that total
Art. 111: . . . the employer concerned shall pay to such worker, upon termination of employment,
remuneration and benefits do not fall below that of the host country a leaving indemnity for the period of his employment calculated on the basis of fifteen days' wages for
regulation and custom." of the Philippines provides: each year of the first three years of service and of one month's wages for each year of service thereafter.
8. Said rule of interpretation is applicable to contracts of adhesion where Such worker shall be entitled to payment of leaving indemnity upon a quantum meruit in proportion to the
period of his service completed within a year.
there is already a prepared form containing the stipulations of the
employment contract and the employees merely "take it or leave it."
9. Contractual parties may select the law by which it is to be governed, In such
a case, the foreign law is adopted as a "system" to regulate the relations of
the parties, including questions of their capacity to enter into the contract, the
formalities to be observed by them, matters of performance, and so forth.
BUT they may just agree on applying specific provisions to incorporate,
instead of adopting the whole law.
a. By such reference to the provisions of the foreign law, the contract
does not become a foreign contract to be governed by the foreign
law. The said law does not operate as a statute but as a set of
contractual terms deemed written in the contract.
10. The choice of law must, however, bear some relationship to the parties
or their transaction. There is no question that the contracts sought to be
enforced by Cadalin et al have a direct connection with the Bahrain law
because the services were rendered in that country.

AMIR DECREE NO. 23

Art. 79: . . . A worker shall receive payment for each extra hour equivalent to his wage entitlement
increased by a minimum of twenty-five per centum thereof for hours worked during the day; and by a
minimum of fifty per centum thereof for hours worked during the night which shall be deemed to being
from seven o'clock in the evening until seven o'clock in the morning. . . .

Art. 80: Friday shall be deemed to be a weekly day of rest on full pay.. . . an employer may require a
worker, with his consent, to work on his weekly day of restif circumstances so require and in respect of
which an additional sum equivalent to 150% of his normal wage shall be paid to him. . . .

Art. 81: . . . When conditions of work require the worker to work on any official holiday, he shall be paid
an additional sum equivalent to 150% of his normal wage.

Art. 84: Every worker who has completed one year's continuous service with his employer shall be entitled
to leave on full pay for a period of not less than 21 days for each year increased to a period not less than
28 days after five continuous years of service.
A worker shall be entitled to such leave upon a quantum meruit in respect of the proportion of his service
in that year.

35
The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the
obscurity.
 031 Sy Joc Lieng v. Sy Quia (DAYU edited by CHIQUI) evidence that these four books or pamphlets were printed by authority of the
March 19, 1910 | Torres, J. | Ascertainment and Proof of Foreign Law Chinese Government or that they have been duly authenticated by the certificate
of competent authorities or that they are properly sealed with the seal of the nation
PETITIONER: Sy Joc Lieng, Sy Yoc Chay, Sy Jui Niu and Sy Chua Niu to which they belong. For this reason the said books or pamphlets can not, under
RESPONDENTS: Petronila Encarnacion, Gregorio Sy Quia, Pedro Sy Quia, Juan any circumstances, be considered as documentary proof of the laws of
Sy Quia, and Generoso Mendoza Sy Quia China. Aside from the fact that it does not specifically appear from the record what
are the Chinese laws applicable to the issues of this case, there is no proof of the
SUMMARY: existence of the Chinese laws referred to by the plaintiffs, nor is there anything to
Sy Quia, a Chinaman, in 1847 married a woman in China, in accordance with the show what the books or pamphlets introduced by them in evidence contain any
laws and customs of China. In 1852, without the first marriage being dissolved, specific laws of the Celestial Empire.
he married another woman in the Philippine Islands, in accordance with the laws
and customs of the Philippine Islands. After the death of Sy Quia, who had DOCTRINE:
accumulated property during the existence of the second marriage, his estate was When in a litigation the application of a foreign law, for example the law of
duly distributed between the second wife and the children of the second wife, by China, is sought, it is necessary to prove before the courts of the Islands, in a
the courts of the Philippine Islands. Fam 1 alleges that they are the only legal heirs satisfactory manner, the existence of such a law as a question of fact; and when
of Sy Quia, Fam 2 claims this too. Fam 1 wants the properties of Sy Quia to be proof of such a law is lacking, it is improper to apply unknown laws to suits
distributed to them according to laws of China since Sy Quia is a China Man. pending before the courts of the Islands.

W/N the estate should be distributed according to the laws of China – No, Fam 1 Whenever a foreign law is invoked in our tribunals, its existence must be
failed to provide sufficient evidence that Chinese laws are applicable. Even satisfactory established as any other fact.
disregarding the fact that Fam 1 should have, but have not, alleged in their
complaint, as one of the facts constituting their cause of action, the existence of a
law passed and promulgated in China, the existence of which law, being foreign, FACTS:
should have been alleged in the complaint, the fact remains that there is absolutely 25. Dec. 4, 1905—Sy Joc Lieng, Sy Joc Chay, Sy Jui and Sy Chua Niu [Basically,
no evidence in the record as to the existence of the Chinese laws referred to by Plaintiffs = Fam 1 from China Marriage] filed an amended complaint against
Fam 1 in their subsequent pleadings, the evidence of this character introduced by the said defendant [Basically, Encarnacion and children = Defendants = Fam
them consisting of books or pamphlets written in Chinese characters and marked 2 from Philippine Marriage], alleging: That in or about the year 1823, one Sy
“exhibits AH, AI, AJ, and AK,” which they claim contain a compilation of the Quia, subsequently known in these Islands as Vicente Romero Sy Quia [Sy
laws of China, being useless and of no value. But most importantly, though the Quia], was born in China, and in or about the year 1847 was married in the
Philippines accepts the application of foreign laws, these must be duly proven. city of Amoy (in China) to Yap Puan Niu, of which marriage they were born
Fam 1, was not able to properly and adequately present the Chinese laws they being the only legitimate heirs of Sy Quia;
claim to rule the partition of estate. They simply showed a pamphlet/book of laws a. That in the year 1894 Sy Quia died intestate in this city of Manila,
that are written in Chinese, with no Spanish/English translation; hence, it could leaving his surviving grandchildren, the plaintiffs, as his only
not be understood by the court. Moreover, even the witness of Fam 1 (Ly Ung legitimate heirs. à In short, Sy Quia has Fam 1 in China, and now
Bing, the interpreter of the American consulate, as to the written and unwritten he is dead and his only legitimate heirs are the China Fam (according
laws of China), does not show, as required by the Code of Civil Procedure, that he to plaintiffs).
knew such laws or that he was acquainted with the nature of the laws alleged to b. Sy Quia acquired a large amount of property, consisting of personal
be contained in the said books. He merely confined himself to expressing his own and real property in the Philippine Islands, mostly located in the city
opinion with reference to the two classes of laws. He, not being an expert on the of Manila, amounting to P 1,000,000 Philippine currency. With this,
subject throughly conversant with the laws of China, his testimony, considering Fam 1 allege that Fam 2 illegally took possession of all the said
the manner in which laws of China, his testimony, considering the manner in personal and real property left by Sy Quia and since then have
which he testified, can not even be accepted as a partial evidence that the said four managed and administered the same, alleging to be owners thereof.
books really contain the written and unwritten laws of China. Hence, there is no
 c. Fam 1 allege that they are the only descendants and legitimate heirs a decree of the CFI of the district of Quiapo, to be the heirs abinstate
Sy Quia. They being entitled to the possession of all the property of of the said deceased.
his estate, as well as of the real and personal property converted and 27. January 31, 1906—Fam 1 presented by way of reply to the answers of the
appropriated by the Fam 2. Fam 2 an amendment to the original complaint, denying generally and
d. Fam 1 prayed that Fam 2 be directed to render under oath a complete specifically all and each of the material allegations set out in the answers of
and detailed account of all the property left by Sy Quia, along with the Fam 2.
the conversions and the rents and profits of the properties, and that a. Fam 2 alleged that the pretended marriage between Vicente Romero
upon the giving of the necessary bond, a receiver be appointed to Sy Quia and Petronila Encarnacion was not a lawful marriage and
administer the original property, as well as the property converted, the certificate of marriage presented by the Fam 2 not being a true
during the pendency of the present litigation. and correct certificate of marriage, for the reason that on June 9,
e. Fam 1 further prayed that it adjudged and decreed that they are the 1853, Vicente Romero Sy Quia was and thereafter continued to be
only descendants and heirs of the said Vicente Romero Sy Quia from the lawful husband of one Yap Puan Niu, until the year 1891, when
and since the time of his death, and that they are the only legitimate she died, and that the marriage of Sy Quia with the said Yap Puan
owners of the real and personal property left by him, and of the Niu, since 1847 and until her death in 1891, was continuously in full
whole of said property converted by the Fam 2 force and effect.
26. Fam 2, as a special defense, allege that prior to 1852, Vicente was an infidel 28. June 19, 1906—counsel for Petronila Encarnacion notified the court of the
known only by the name of Sy Quia, he having resided in the Philippine death of Petronila Encarnacion.
Islands for many years prior thereto. Also, that on June 8, 1852, the said 29. August 20, 1906—it was stipulated between counsel for both parties that by
infidel Chinaman was converted to the Christian religion, and was baptized order of the court the deposition of several witnesses then designated by Fam
in the parish church of San Vicente, Ilocos Sur, under the name of Vicente 1 be taken at Amoy, China, before the consul, vice-consul, or a consular agent
Ruperto Romero Sy Quia, as shown by his certificate of baptism. of the United States in the said city, during the days and in the manner agreed
a. On June 9, 1853, the Christian Chinaman contracted canonical upon.
marriage in accordance with the laws then in force in these Islands, 30. January 4, 1907—Fam 2 presented a motion to the CFI, asking that the
with the defendant Petronila Encarnacion, a native of Vigan, Ilocos depositions taken before the consul of the United States at Amoy, China, as
Sur; that the said Vicente Sy Quia and his wife, Petronila given by the witnesses for Fam 1, named Li Ung Bing, Sy Peng, Lim Chio,
Encarnacion, fixed their residence and conjugal domicile in these Yap Si Tan, Yap Chia, Sy Kay Tit, Yap Chong, Sy Boan, Sy Kong Len, and
Islands until the dissolution of the conjugal partnership by the death Sy Hong Oan, whose testimony Fam 1 attempted to introduce in this action,
of the husband on January 9, 1894. be not admitted, Fam 2’s motion being based on the ground that the said
b. At the time of their marriage Vicente had no property, and brought depositions contained a formal defects concerning the manner in which the
no property into the marriage, but that the wife brought to the oath was administered to the witnesses.
marriage a small capital which was the foundation of the subsequent 31. Feb. 26, 1908—CFI rendered a judgment declaring that Fam 1 and Fam 2 as
fortune acquired by the spouses by their labor and industry, and by the administrator of the property, were the heirs of the property of the estate
the labor and industry of the children—Apolinaria, Maria, Gregorio, of Vicente Romero Sy Quia, now deceased, consisting of one-half of the
Pedro and Juan—all of whom have always been in continuous property distributed by the order of the CFI of the district of Quiapo of the
possession of the status of legitimate children. à In short, Fam 2 3rd of August, 1900, in the following form: To Sy Joc Lieng, one-ninth; Sy
says: Sy Quia married Encarnacion and was actually residing in the Yoc Chay, one-ninth; Sy Chua Niu, one-ninth; C. W. O’Brien, as the
Philippines for years prior to marriage. Also, he didn’t even guardian of Sian Han, one-ninth; Pedro Sy Quia, one-ninth; Juan Sy Quia,
contribute anything to the marriage, the small capital was from one-ninth; Gregorio Sy Quia, one-ninth; Generoso Mendoza Sy Quia, one-
Encarnacion (5000 pesos actually, this and hard work became the ninth; and the heirs of Petronila Encarnacion, represented by Pedro Sy Quia
foundation of the fortune), so kami yung legit kids. as the administrator of the latter’s estate, one-ninth; the heirs of the said
c. Fam 2 further state that on January 9, 1894, Sy Quia died intestate Petronila Encarnacion, represented by the administrator of her estate, being
in the city of Manila, and after the necessary legal proceedings under the owners with the right to possession of the other half of the property left
the legislation then in force, his surviving children were declared by by Vicente Romero Sy Quia at the time of his death. (So lahat sila) and that
Fam 2, render a statement of the property which was distributed among them.
 32. To this decision of the trial court, Fam 2 duly excepted and asked that the a. These matrimonial letters, once they have been mutually exchanged
said judgment be set aside and a new trial granted on the ground that the by the contracting parties, constitute the essential requisite required
evidence was insufficient to justify the decision in favor of the Fam 1, and by the laws of that country in order that a Chinese marriage may be
because the decision of the trial court was contrary to law, the findings of considered duly solemnized, and at the same time are the best proofs
fact being plainly and manifestly against the weight of the evidence. of its having actually taken place.
33. Fam 1, upon being notified of the said judgment of the court, excepted 54. The sworn statement by Vicente Romero Sy Quia before the civil and
thereto, and requested in writing that the court modify its decision. ecclesiastical authorities of the city of Vigan in the proceedings which were
34. This action has for its purpose primarily to recover from the present instituted in 1853 in connection with his marriage in the parish church of that
possessors the property left at the time of his death in this city by the Christian city, the continue possession for a period of many years of the status of a
Chinaman, Vicente Romero Sy Quia, Fam 1alleging that three of them are single man enjoyed by him and recognized and accepted by the whole
the grandchildren and one of the great-grandson of the deceased Sy Quia by community of the capital of the Province of Ilocos Sur, the belief on the part
his lawful marriage in his own country with their deceased grandmother, Yap of his townsmen and neighbors that he was in fact a single man, all these facts
Puan Niu. So that the marriage of the said Sy Quia with this woman in China corroborated, as they are, by the uniform testimony of the witnesses for the
is practically the fundamental basis of the action brought by Fam 1 for the defendants, and unexplained silence on the part of his alleged wife, Yap Puan
recovery of the inheritance against the defendants, who appear to be the Niu, who might have asserted whatever rights she may have had as the
children of the deceased Sy Quia by his marriage in these Islands with the legitimate wife of Sy Quia before the tribunals of this country, if she really
native, Petronila Encarnacion. had any, completely overcome and destroy the improvised parol evidence as
to be pretended marriage of Sy Quia in China.
ISSUE/s: 55. Counsel for Fam 1 now ask this court to modify the judgment appealed from
W/N the estate should be distributed according to the laws of China – No, Fam 1 failed and to declare that the said plaintiffs are the only legitimate heirs of Sy Quia
to provide sufficient evidence that Chinese laws are applicable. and consequently entitled to his entire estate, together with all rents and
profits, for which judgment should be entered in their favor with costs. In
RULING: For the reasons hereinbefore stated, we are of the opinion, and so hold, that support of their contention they have assigned various errors as committed
the judgment of the trial court, appealed from by both parties, should be reversed, and by the trial court, among them that the court erred in finding as a conclusion
that we should, and do hereby, absolve the defendants of the complaint upon which of law that the said Sy Quia was a subject of the Chinese Empire and that his
this action was instituted, without any special order as to the costs of both instances. estate should be distributed in accordance with the laws of China.
The bond given by the receiver, Gregorio Sy Quia, is hereby discharged and the a. It is an admitted fact that Sy Quia was a native Chinaman and
petition heretofore made for the appointment of a new receiver is hereby denied. It is therefore a foreigner; that he came to this country in 1839 or 1840,
so ordered. when he was 12 years of age. He having resided in these Islands
since then and until January, 1894, when he died, that is to say, for
RATIO: a period of more than 53 years, having obtained for this purpose the
53. Fam 1 having failed to present at the trial the matrimonial letters which should necessary license or permission, and having been converted to the
have been exchanged between the contracting parties at the time the said Catholic religion, marrying a native woman in the city of Vigan and
marriage was performed, according to the ancient laws and customs of the establishing his domicile first in the Province of Ilocos and later in
Celestial Kingdom, and there being no allegation in the complaint as to the this city of Manila, with the intention of residing here permanently,
day and month of the common calendar year, or of the Chinese calendar year, engaging in business generally and acquiring real estate, it is
when the said marriage took place, there is no ground on which to base the unquestionable that by virtue of all these acts he acquired a residence
conclusion that such an important act in the life of Sy Quia has been duly and became definitely domiciled in these Islands with the same
established by authentic documents, nor is his alleged voyage to China from rights as any nationalized citizen in accordance with the laws in
the port of Manila for the purpose of contracting such marriage, satisfactorily force in these Islands while he lived here and until his death.
proven thereby, for Fam 1 has likewise failed to introduce in evidence the 56. In order to determine what rights Sy Quia had actually since he removed to
passport, required by the legislation then in force, which should and would the Philippines in 1839 or 1840, it will be necessary to resort to the laws in
have been then issued to Vicente in order to enable him to leave this country force at that time;
and return to his own.
57. The legislation then in force on the subject of naturalization and residence of 64. Section 300 of the Code of Civil Procedure reads as follows:
foreigners in the Philippine Islands will be found in the following laws a. "Books printed or published under the authority of the United States,
(Novisima Recopilacion). or of one of the States of the United States, or a foreign country, and
58. Of the Chinaman Vicente Romero Sy Quia on account of his continuous purporting to contain statutes, codes, or other written law of such
residence in these Islands for a period of more than fifty years, and by virtue State or country, or proved to be commonly admitted in the tribunals
of the fact that he had permanently established himself in this country, living of such State or country as evidence of the written law thereof, are
in a house of his own, with his wife and children, and having acquired real admissible in the Philippine Islands as evidence of such law."
estate therein, did become a domiciled denizen under the laws then in force. 65. Section 301 of the same code provides:
59. To this, the SC counters by saying that Sy Quia has actually chosen to be a. "A copy of the written law, or other public writing of any State or
governed by Philippine law and is a Filipino Citizen. (1) He stayed in the country, attested by the certificate of the officer having charge of the
Philippines for more than 53 years, having obtained for the purpose the original, under the seal of the State or country, is admissible as
necessary license or permission and having been converted to the Catholic evidence of such law or writing."
religion; (2) he married a native woman in the city of Vigan and established 66. Section 302 provides as follows:
his domicile in Ilocos first then Manila, with the intention of residing here a. "The oral testimony of witnesses, skilled therein, is admissible as
permanently; (3) engaging in business generally and acquiring real estate— evidence of the unwritten law of the United States or of any State of
it is unquestionable then that he has acquired a residence and became the United States, or foreign country, as are also printed and
domiciled in the Philippines with the same rights as any nationalized citizen. published books of reports of decisions of the courts of the United
With this, the partitioning of his estate should follow Philippine laws. States or of such State or country, or proved to be commonly
60. Fam 1 in this case have invoked certain provisions of the Chinese laws as one admitted in such courts."
of the grounds of the action by them instituted and now contend that the estate 67. The jurisprudence of American and Spanish tribunals is uniform on this
of Vicente Romero Sy Quia, deceased, should be distributed in accordance subject. For the purposes of this decision, however, it will be sufficient to
with the laws of that country. refer to the judgment of the supreme court of Spain of the 26th of May, 1887,
61. Even disregarding the fact that Fam 1 should have, but have not, alleged in where in it is said: "Whenever a foreign law is invoked in our tribunals,
their complaint, as one of the facts constituting their cause of action, the its existence must be satisfactory established as any other fact.”
existence of a law passed and promulgated in China, the existence of which 68. If the pamphlets or books, written in Chinese characters, do not satisfactory
law, being foreign, should have been alleged in the complaint, the fact establish the existence of certain Chinese laws invoked by Fam 1, not only
remains that there is absolutely no evidence in the record as to the because such pamphlets or books lack the aforesaid formalities and
existence of the Chinese laws referred to by plaintiffs in their subsequent requisites, but further because there is no evidence as to the nature of the laws
pleadings, the evidence of this character introduced by them consisting of contained in those books or pamphlets and the subjects with which they deal.
books or pamphlets written in Chinese characters and marked "Exhibits AH, 69. On the other hand, the two witnesses whose testimony was introduced for the
AI, AJ, and AK,’ which they claim contain a compilation of the laws of purpose of establishing the authenticity of the laws which, according to Fam
China, being useless and of no value. 1, are contained in the said books, were unable to say positively at least that
62. It may be that contain, as Fam 1 claims, the laws of China, but we have no the book marked Exhibit AH contains an exact copy of the original. And the
Spanish translation of them, they being in the Chinese language, and written Chinese consul of this city, Sy Int Chu, after stating that he had never made
with characters which are absolutely unknown to this court and to the a regular study of the laws of his country, simply consulting the same in
defendants. connection with his official reports, admitted that he had never read or seen
63. Further, Fam 1 have not introduced expert testimony in the manner and form the original copy of this alleged compilation, the books not being duly
prescribed by section 292 of the Code of Civil Procedure, and, finally, there certified, adding that he could not say whether the book marked. "Exhibit
is no evidence that these four books or pamphlets were printed by authority AH" was an exact copy of the original.
of the Chinese Government or that they have been duly authenticated by the 70. The testimony of the witness Ly Ung Bing, the interpreter, as to the written
certificate of competent authorities or that they are properly sealed with the and unwritten laws of China, does not show, as required by the Code of Civil
seal of the nation to which they belong. For this reason the said books or Procedure, that he knew such laws or that he was acquainted with the nature
pamphlets can not, under any circumstances, be considered as documentary of the laws alleged to be contained in the said books. He merely confined
proof of the laws of China. himself to expressing his own opinion with reference to the two classes of
 laws. He, not being an expert on the subject throughly conversant with the
laws of China, his testimony, considering the manner in which laws of China,
his testimony, considering the manner in which he testified, can not even be
accepted as a partial evidence that the said four books really contain the
written and unwritten laws of China.
71. Aside from the fact that it does not specifically appear from the record what
are the Chinese laws applicable to the issues of this case, there is no proof of
the existence of the Chinese laws referred to by the plaintiffs, nor is there
anything to show what the books or pamphlets introduced by them in
evidence contain any specific laws of the Celestial Empire.
 002 In re: Estate of Johnson (Valle) a. first, because the petition does not state any fact from which it would
16 November 1918 | Street, J. | Ascertainment of Foreign Law appear that the law of Illinois is different from what the court found, and,

In the matter of the estate of Emil. H. Johnson, Ebba Ingeborg Johnson b. secondly, because the assignment of error and argument for the
appellant in this court raises no question based on such supposed error.
SUMMARY:
Johnson was born in Sweden and a naturalized US citizen. He was married in the
US to Ackenson and had their daughter, Ebba. When Johnson joined the army, he DOCTRINE:
went to the Philippines and stayed there after. He got divorced from Ackenson and
married Alejandra Ibanez who had three of his children. He later had two other Nevertheless, even supposing that the trial court may have erred in taking judicial
children from Simeona Ibanez. When Johnson died, his holographic will was notice of the law of Illinois on the point in question, such error is not now available
probated despite the fact that he only had two witnesses instead of three. However, to the petitioner, first, because the petition does not state any fact from which it
a petition was made stating that the will was made in conformity with US Law, would appear that the law of Illinois is different from what the court found, and,
thus valid in the Philippines as provided for in Section 636 in the Code of Civil secondly, because the assignment of error and argument for the appellant in this
Procedure. The will was later probated and declared legal, however Ebba entered court raises no question based on such supposed error.
an appearance, claiming that as a legitimate child she cannot be deprived of the
legitime which she is entitled to as provided by Philippine law. She moved to
annul the decree of probate and put the estate into intestate administration in order FACTS:
for her to claim the estate as the sole legitimate heir of her father. What is being 35. Emil Johnson (Johnson) is a native of Sweden and a naturalized citizen of the
contested in Johnson’s citizenship and what law should be applied. US. He died in manila leaving a holographic will where he disposed of an
The issue is whether or not the probate of the will can be set aside on the ground estate that was valued at Php 231, 800. The will was written in his pwn riting
that johnson was not a resident of Illinois and not in conformity with the laws of and signed by him with two witnesses (instead of three as required by sec
Illinois. 616 of the Code of Civil Procedure). It wasn’t executed in conformity with
the law applicable to wills excuted by inhabitants of these Islands and hence
couldn’t be proved under the Code of Civil Procedure.
The SC held in the negative. Johnson is a citizen of Illinois and a resident of the 36. A petition was presented in the CFI of Manila for the probate of the will on
Philippines. Upon the date of the execution of the will the testator was a citizen the ground that Johnson at time of death was the citizen of Illois, US; that the
of the State of Illinois and that the will was executed in conformity with the laws will was duly executed in that state and hence could properly be probated
of that State. 11. The trial judge no doubt was satisfied that the will was pursuant to the Code of Civil Procedure which says:
properly executed by examining section 1874 of the Revised Statutes of Illinois; 37. A will made here by an alien -- A will made within the Philippine Islands by
and he may have assumed that he could take judicial notice of the laws of a citizen or subject of another state or country, which is executed in
Illinois. If so, the court says he was mistaken. that section authorizes the courts accordance with the law of the state or country of which he is a citizen or
here to take judicial notice, among other things, of the acts of the legislative subject, and which might be proved and allowed by the law of his own state
department of the United States. or country, may be proved, allowed, and recorded in the Philippine Islands,
and shall have the same effect as if executed according to the laws of these
The proper rule we think is to require proof of the statutes of the States of the Islands.
American Union whenever their provisions are determinative of the issues in any 38. The hearing was set and three weeks of publication of notice was ordeded in
action litigated in the Philippine courts. N evertheless, even supposing that the the Manila Daily Bulletin. Witnesses were examined and thereafter the
TC may have erred in taking judicial notice of the law of Illinois on the point in document was declared to be legal and was admitted to provate.
question, such error is not now available to Ebba 39. The will gave to Victor one hundred shares of corporate stock in Johnson-
Pickett Rope Company. To his father andmother in Sweden, he left 20 000
pesos; to his daughter Ebba Ingeborg is 5000; to his wife, Alejandra banez,
75 pesos per month, if she remains single. To Simeona Ibanez, a spinster, 65
per month if she remains single. The rest is left to his five children, Mercedes,
 Encarnacion, Victor, Eleonor and Alberto. State of Illinois, County of Cook, and that the will in question was
40. Note these facts: Johnson was born in Sweden and emigrate dto the US executed in conformity with the dispositions of the law f the State
where he lived in Chicago, Illinois for five years. At Chicago, he married of Illinois.”
Rosalie Ackeson and after that went to the Philippines as a soldier in the US
army. He had a daughter with Ackeson anmed Ebba Ingeborg. After Johnson 73. We consider this equivalent to a finding that upon the date of the execution
was discharged a soldier, he continued to live in the Philippines and later on of the will the testator was a citizen of the State of Illinois and that the will
he was granted a divorce decree from Rosalie on the ground of desertion. was executed in conformity with the laws of that State. Upon the last point
Johnson appeared in the US for a visit and procured a certificate of the finding is express; and in our opinion the statement that the testator was
naturalization at Chicago. From Chicago he went to Sweden wher a a citizen of the United States, naturalized in the State of Illinois, should be
phorograpg was taken where he appeared with his family. Then he returned taken to imply that he was a citizen of the State of Illinois, as well as of the
to Manil where he lived until his death. United States.
41. In Manila, he married Alejandra Ibanez whom he had three children, 74. It is noteworthy that the petition by which it is sought to annul the probate of
Mercedes, Encarnacion. And Victor. The other two children mentioned were this will does not assert that Johnson was not a citizen of Illinois at the date
borne to Simeona Ibanez. when the will was executed. The most that is said on this point is he was
42. After the probation of the will, Ebba entered an appearance and noted an "never a resident of the State of Illinois after the year 1898, but became and
exeception to the other admitting the will to probate. Ebba moved to vacate was a resident of the city of Manila," etc.
the order and other various orders in the case. The motion was denied hence 75. But residence in the Philippine Islands is compatible with citizenship in
this appeal. Illinois; and it must be considered that the allegations of the petition on this
43. The purpose of the appeal is to annul the decree of proabate and put the etstae point are, considered in their bearing as an attempt to refute citizenship in
into intestate administration, which will make way for the establishment of Illinois, wholly insufficient.
the claim of Ebba as the sole legitimate heir of her father. 76. As the Court of First Instance found that the testator was a citizen of the State
44. She claims: of Illinois and that the will was executed in conformity with the laws of that
a. Johnson was a resident of Manila dn not of Illinois at the time of the State, the will was necessarily and properly admitted to probate.
will in question was executed 77. T he principal controversy is over the citizenship of Johnson. The evidence
b. The will is invalid and inadequate to pass real and personal property adduced upon this point in the trial court consists of the certificate of
in the state of Illinois
naturalization granted in Illinois.
c. The order admitting the will to probate was made without notice to
78. The certificate of naturalization supplies incontrovertible proof that upon the
Ebba
date stated Johnson became a citizen of the United States, and inferentially
d. The order in question was beyond the jurisdiction of the court
also a citizen of Illionois.
ISSUE/s:
79. In the testimony submitted to the trial court it appears that, when Johnson
10. WoN the probate of Johnson’s will can be set aside on the ground that
first came to the United States as a boy, he took up his abode in the State of
johnson was not a resident of Illinois and that the will was not in conformity
Illinois and there remained until he came as a soldier in the United States
to the laws of Illinois – NO because the petition did not state any fact that the
Army to the Philippine Islands. Although he remained in the Philippines for
Illinois law is different.
sometime after receiving his discharge, no evidence was adduced showing
that at the time he returned to the United States, he had then abandoned
RULING: It follows that the trial court committed no error in denying the relief
Illinois as the State of his permanent domicile, and on the contrary the
sought. The order appealed from is accordingly affirmed with costs. So ordered.
certificate of naturalization itself recites that at that time he claimed to be a
resident of Illinois.
RATIO:
80. There is no law in force by virtue of which any person of foreign nativity can
72. The The order of the Court of First Instance admitting the will to probate
become a naturalized citizen of the Philippine Islands; and it was, therefore,
recites, among other things: impossible for Johnson even if he had so desired, to expatriate himself from
the United States and change his political status from a citizen of the United
a. “That upon the date when the will in question was executed Emil States to a citizen of the Phil. This being true, it is to be presumed that he
H. Johnson was a citizen of the United States, naturalized in the
 retained his citizenship in the State of Illinois along with his status as a any legacy given by the will or other disposition made therein is contrary
citizen of the United States. It would be novel doctrine to Americans living to the law applicable in such case, the will must necessarily yield upon
in the Philippine Islands to be told that by living here they lose their that point and the law must prevail.
citizenship in the State of their naturalization or nativity. 90. Nevertheless, it should not be forgotten that the intrinsic validity of the
81. Upon the other point — as to whether the will was executed in conformity provisions of this will must be determined by the law of Illinois and not,
with the statutes of the State of Illinois — The Court notes that it does not as the appellant apparently assumes, by the general provisions here applicable
affirmatively appear from the transaction of the testimony adduced in the trial in such matters; for in the second paragraph of article 10 of the Civil Code it
court that any witness was examined with reference to the law of Illinois on is declared that "legal and testamentary successions, with regard to the order
the subject of the execution of will. of succession, as well as to the amount of the successional rights and to the
82. The trial judge no doubt was satisfied that the will was properly executed by intrinsic validity of their provisions, shall be regulated by the laws of the
examining section 1874 of the Revised Statutes of Illinois; and he may have nation of the person whose succession is in question, whatever may be the
assumed that he could take judicial notice of the laws of Illinois . nature of the property and the country where it may be situate."
83. If so, the court says he was mistaken. that section authorizes the courts
here to take judicial notice, among other things, of the acts of the
legislative department of the United States.
84. These words clearly have reference to Acts of the Congress of the United
States; and we would hesitate to hold that our courts can, under this
provision, take judicial notice of the multifarious laws of the various
American States. Nor do we think that any such authority can be derived
from the broader language, used in the same action, where it is said that our
courts may take judicial notice of matters of public knowledge "similar" to
those therein enumerated.
85. The proper rule we think is to require proof of the statutes of the States
of the American Union whenever their provisions are determinative of
the issues in any action litigated in the Philippine courts.
86. N evertheless, even supposing that the TC may have erred in taking judicial
notice of the law of Illinois on the point in question, such error is not now
available to Ebba
a. first, because the petition does not state any fact from which it
would appear that the law of Illinois is different from what the
court found, and,
b. secondly, because the assignment of error and argument for the
appellant in this court raises no question based on such
supposed error.
87. But it is insisted in the brief for the appellant that the will in question was not
properly admissible to probate because it contains provisions which cannot
be given effect consistently with the laws of the Philippine Islands; and it is
suggested that as Ebba is a legitimate heir of the testator she cannot be
deprived of the legitime to which she is entitled under the law governing
testamentary successions in these Islands.
88. Upon this point it is sufficient to say that the probate of the will does not
affect the intrinsic validity of its provisions, the decree of probate being
conclusive only as regards the due execution of the will.
89. If therefore, upon the distribution of this estate, it should appear that
 003 FLUEMER v. HIX (VICENCIO) 17. It is the theory of the A.W. Fluemer, special administrator of the estate of
March 17, 1930 | Malcolm, J. | Proof of Foreign Law Edward Randolph Hix, that the alleged will of the deceased was executed in
Elkins, West Virginia, on November 3, 1925, by Edward Hix who had his
residence in that jurisdiction, and that the laws of West Virginia govern.
In the matter Estate of Edward Randolph Hix (deceased).
18. To this end, there was submitted a copy of section 3868 of Acts 1882, c. 84
PETITIONER: A.W. Fluemer
RESPONDENTS: Annie Cousins Hix as found in West Virginia Code, annotated by Hogg, Charles E. (vol. 2, 1914,
p. 1690) and as certified to by the Director of the National Library.
SUMMARY: Fluemer, special administrator of the estate of Edward Hix 19. Judge of First Instance Tuason denied the probate of the document alleged to
(deceased), alleges that since the alleged will of the deceased was executed in be the last will and testament of the deceased Edward Hix.
Elkins, West Virginia by the deceased who had his residence in that jurisdiction, 20. A.W. Fluemer appeals to this court.
the laws of West Virginia should govern. Hence, there was submitted a 21. Annie Hix, appellee, contends that the A.W. Fluemer, appellant, as a mere
copy/extract of the West Virginia Code, as certified by the Director of the National special administrator is not authorized to carry on this appeal.
Library. The Judge of First Instance however denied the probate of the last will.
Fluemer appealed. ISSUE/s:
1. WoN the will of the deceased was rightfully denied probate – YES. The
Issue: WoN the lower court rightfully denied probate – YES. The will was far from requirements of the law were not met.
compliance with the law. (See Doctrine). There was no showing that the book from
which the extract was taken was published under authority of the State of West RULING: The judgment appealed from will be affirmed, with the costs of this
Virginia. Nor was the extract attested by the certificate of the officer having in instance against the appellant.
charge of the original, under the seal of the State of West Virginia. There was also
no evidence to show that the extract of the law was in force at the time the alleged RATIO:
was executed. The due execution of the will was also not established (See Ratio 4). On the minor issue of WoN Fluemer can carry on this appeal
Fluemer also failed to prove that the testator had his domicile in West Virginia. 6. We (the SC) think, however, that the Fluemer, who appears to have been the
moving party in these proceedings, was a "person interested in the allowance
Fluemer also began administration proceedings originally in the Philippine Islands. or disallowance of a will by a Court of First Instance," and so should be
The application for the probate of the will in the Philippines was filed on February permitted to appeal to the Supreme Court from the disallowance of the will
20, 1929, while the proceedings in West Virginia appear to have been initiated on (Code of Civil Procedure, Sec. 781).
June 8, 1929. These facts are strongly indicative of an intention to make the On the validity of the will
Philippines the principal administration and West Virginia the ancillary 7. It was from a compliance with the law. The laws of a foreign jurisdiction
administration. Regardless, there was also no request for a hearing on the question do not prove themselves in our courts. The courts of the Philippine
of the allowance of a will which was said to have been proved and allowed in West Islands are not authorized to take judicial notice of the laws of the
Virginia. various States of the American Union. Such laws must be proved as facts.
8. Here the requirements of the law were not met.
DOCTRINE: The laws of a foreign jurisdiction do not prove themselves in our 1. There was no showing that the book from which an extract was
courts. The courts of the Philippine Islands are not authorized to take judicial notice taken was printed or published under the authority of the State
of the laws of the various States of the American Union. Such laws must be proved of West Virginia, as provided in section 300 of the Code of Civil
as facts Procedure.
2. Nor was the extract from the law attested by the certificate of
the officer having charge of the original, under the seal of the
FACTS:
State of West Virginia, as provided in section 301 of the Code of
16. (Note: This is the full case. Since the OG case is very short and awfully
Civil Procedure.
written, I added words and rearranged it so much to make it understandable.
Please take this digest with a grain of salt.)
 3. No evidence was introduced to show that the extract from the for no hearing on the question of the allowance of a will said to have been
laws of West Virginia was in force at the time the alleged will proved and allowed in West Virginia has been requested.
was executed. 18. There is no showing that the deceased left any property at any place other
9. In addition, the due execution of the will was not established. than the Philippine Islands and no contention that he left any in West
1. The only evidence on this point is to be found in the testimony of Virginia.
the Fluemer. 19. Reference has been made by the parties to a divorce purported to have been
2. Aside from this, there was nothing to indicate that the will was awarded Edward Randolph Hix from Annie Cousins Hix on October 8, 1925,
acknowledged by the testator in the presence of two competent in the State of West Virginia. The present proceedings do not call for any
witnesses, or that these witnesses subscribed the will in the presence specific pronouncements on the validity or invalidity of this alleged divorce.
of the testator and of each other as the law of West Virginia seems
to require.
3. On the supposition that the witnesses to the will reside without the
Philippine Islands, it would then be the duty of the petitioner to
prove execution by some other means (Code of Civil Procedure, sec.
633).
10. It was also necessary for the Fluemer to prove that the testator had his
domicile in West Virginia and not in the Philippine Islands. The only
evidence introduced to establish this fact consisted of the recitals in the
alleged will and the testimony of the petitioner.
11. Also in beginning administration proceedings originally in the Philippine
Islands, the Fluemer violated his own theory by attempting to have the
principal administration in the Philippine Islands.
12. While the appeal was pending submission in this court, the attorney for the
appellant presented an unverified petition asking the court to accept as part
of the evidence the documents attached to the petition.
13. One of these documents discloses that a paper writing purporting to be the
last will and testament of Edward Randolph Hix, deceased, was presented for
probate on June 8, 1929, to the clerk of Randolph County, State of West
Virginia, in vacation, and was duly proven by the oaths of Dana Wamsley
and Joseph L. Madden, the subscribing witnesses thereto, and ordered to be
recorded and filed.
14. It was shown by another document that, in vacation, on June 8,1929, the clerk
of court of Randolph County, West Virginia, appointed Claude W. Maxwell
as administrator, cum testamento annexo, of the estate of Edward Randolph
Hix, deceased.
15. In this connection, it is to be noted that the application for the probate of the
will in the Philippines was filed on February 20, 1929, while the proceedings
in West Virginia appear to have been initiated on June 8, 1929.
16. These facts are strongly indicative of an intention to make the Philippines
the principal administration and West Virginia the ancillary
administration.
17. However this may be, no attempt has been made to comply with the
provisions of sections 637, 638, and 639 of the Code of Civil Procedure,
 WILLIAMETTE v. MUZZAL (Salve) cent per annum from March 11, 1929, until paid, and to pay also the amount of
May 21, 1935 | Goddard, J. | Foreign Law P1,590.63, for the second cause of action, with interest thereon at 7 per cent per
annum from April 8, 1929, until paid. The defendant is further ordered to pay the
PETITIONER: Williamette Iron & Steal Works amount of P500 as reasonable attorney's fees in prosecuting this action, and to pay
RESPONDENTS: A.H. Muzzal the costs of these proceedings.
2. This case involves the liability of the Muzzal, a former resident of the State of
SUMMARY: Muzzal was liable as stockholder of Meyer-Muzzal Company to California, now residing in the Philippine Islands, for obligations contracted by a
Williamette Iron & Steal Works. Williamette seeks to recover on the basis of Sec California corporation of which he was a stockholder at the time said obligations
322 of the Civil Code of California. WoN Muzzal was a shareholder in Meyer- were contracted with the Williamette in this case.
Muzzal Company – YES, because the witness Hermann a certified public 3. Williamette seeks to recover on the basis of Sec 322 of the Civil Code of
accountant, testified that he knows that the Meyer-Muzzal Company is a California. 36
corporation that included Muzzal as shareholder, evinced by corporate books. 4. Muzzal argued the following:
Muzzal was the owner of 1,433 shares of stock of the corporation Meyer-Muzzal I. The lower court erred in holding that Muzzal was the holder of 1,432 shares of
Company when it contracted the obligations alleged in the complaint. the capital stock of the Meyer-Muzzal Company.
II. The lower court erred in finding that Williamette has proven the existence of
WoN Section 322 of the California Civil Code was in force at the time the the foreign law involved in this action.
obligations were incurred – YES, Mr. Arthur W. Bolton, an attorney-at-law of San III. The lower court erred in enforcing the law of California.

Francisco, California, since the year 1918, under oath, quoted verbatim section 322 IV. The lower court erred in rendering judgment against the Muzzal
of the California Civil Code and stated that said section was in force at the time the
obligations were incurred. Ragland's Annotated Civil Code of California was also ISSUE/s:
presented as evidence. 2. WoN Muzzal was a shareholder in Meyer-Muzzal Company – YES, because the
witness Hermann a certified public accountant, testified that he knows that the
WoN Muzzal’s liability would be provided from the California Civil Code – YES, Meyer-Muzzal Company is a corporation that included Muzzal as shareholder,
because Muzzal as one of the incorporators and resident and citizens of California evinced by corporate books.
cannot now escape liability by alleging that the California law is unjust and 3. WoN Section 322 of the California Civil Code was in force at the time the
different from the inconsistent with the Philippine Corporation Law. obligations were incurred – YES, Mr. Arthur W. Bolton, an attorney-at-law of
San Francisco, California, since the year 1918, under oath, quoted verbatim
DOCTRINE: "The foreign law is a matter of fact ... You ask the witness what the section 322 of the California Civil Code and stated that said section was in force
law is; he may from his recollection, or on producing and referring to books, say at the time the obligations were incurred
what it is." 4. WoN Muzzal’s liability would be provided from the California Civil Code – YES,
because Muzzal as one of the incorporators and resident and citizens of California
cannot now escape liability by alleging that the California law is unjust and
different from the inconsistent with the Philippine Corporation Law.
FACTS:
1. This is an appeal from a decision of the Court of First Instance of Zamboanga
RULING: The judgment of the trial court is affirmed with costs in both instances
which was a judgment in favor of Williamette. The judgment ordered Muzzal to
pay Williamette the sum of P2,837.34, with interest thereon at the rate of 6 per

36
SEC. 322. Each stockholder of a corporation is individually and personally liable for such proportion of liability for such debt, and if an action has been brought against him upon such debt, it must be dismissed,
all its debts and liabilities contracted or incurred during the time he was a stockholder as the amount of as to him, upon his paying the costs, or such proportion thereof as may be properly chargeable against
stock or shares owned by him bears to the whole of the subscribed capital stock or shares of the him. The liability of each stockholder is determined by the amount of stock or shares owned by him at the
corporation. Any creditor of the corporation may institute joint or several actions against any of its time the debt or liability was incurred; and such liability is not released by any subsequent transfer of
stockholders, for the proportion of his claim payable by each, and in such action the court must (1) stock.
ascertain the proportion of the claim or debt for which each defendant is liable, and (2) a several judgment
must be rendered against each, in conformity therewith. If any stockholder pays his proportion of any debt
due from the corporation, incurred while he was such stockholder, he is relieved from any further personal
against the defendant- appellant.

RATIO:
1. As to the first assignment of error the witness Stanley H. Hermann, a certified
public accountant, testified that he knows that the Meyer-Muzzal Company is a
corporation and further testified that Mr. A.H. Muzzal was a stockholder of the
Meyer-Muzzal Company on the dates specified (on November 5, 1928 and
December 22, 1928). 1,433 shares of the capital stock of Meyer- Muzzal
Company of the par value of $10 each were subscribed and owned by said A.H.
Muzzal on said dated and said shares were issued to and standing in the name of
A. H. Muzzal on the books of said company at said times.
2. Muzzal was the owner of 1,433 shares of stock of the corporation Meyer-Muzzal
Company when it contracted the obligations alleged in the complaint.
3. As to the second assignment of error Mr. Arthur W. Bolton, an attorney-at-law of
San Francisco, California, since the year 1918, under oath, quoted verbatim
section 322 of the California Civil Code and stated that said section was in force
at the time the obligations of were incurred
4. This evidence sufficiently established the fact that the section in question was the
law of the State of California on the above dates.
5. A reading of sections 300 and 301 of our Code of Civil Procedure will convince
one that these sections do not exclude the presentation of other competent
evidence to prove the existence of a foreign law.
6. Aside from the testimony of Attorney Bolton, Ragland's Annotated Civil Code of
California was presented as evidence. This book contains that State's Civil Code
as adopted March 21, 1872, with the subsequent official statute amendments to
and including the year 1929.
7. In the third and fourth assignments of error Muzzal argues that since the law of
California, as to the liability of stockholders of a corporation, is different from
and inconsistent with the Philippine Corporation Law the courts here should not
impose liability provided in that law upon a resident of these Islands who is a
stockholder of a California corporation.
8. Muzzal was one of the incorporators of the company and that Muzzal was
chargeable with notice of the law of California as to the liability of stockholders
for debt of a corporation proportionate to their stock holdings
9. Muzzal was a resident and citizen of California.
10. Muzzal cannot now escape liability by alleging that the California law is unjust
and different from the inconsistent with the Philippine Corporation Law.
 005 CIR v. FISHER (APASAN) the husband. The CTA further disallowed certain claims for deductions and
January, 28, 1961 | Barrera, J. | Case Law; Doctrine of Processual Presumption exemptions by the estate.
ISSUE: WoN the Law of England or PH law should be followed in the
G.R. No. L-11622 computation of the net estate of decedent Stevenson – PH law.
PETITIONER: The Collector of Internal Revenue
RESPONDENTS: Douglas Fisher and Bettina Fisher and the Court of Tax In this case, the Old Civil Code applies to the spouses because they got
Appeals married in 1909 which was prior to the enactment of the New Civil Code
G.R. No. L-11668 in 1950. However, the application of Art 1325 of the Old Civil Code would
PETITIONER: Douglas Fisher and Bettina Fisher and the Court of Tax Appeals not be proper because it only covers mixed marriages between an alien
RESPONDENTS: The Collector of Internal Revenue and a Filipino but in this case, both spouses were foreigners which makes
their nationality law (English Law) apply. BUT as correctly observed by the
SUMMARY: Walter G. Stevenson (Stevenson) was a British citizen (both
parents were British) born in the Philippines. He married Beatrice Stevenson Tax Court, the pertinent English law that allegedly vests in the decedent
(Beatrice), another British citizen, in Manila but they moved to California USA husband full ownership of the properties acquired during the marriage has
where they established their permanent residence. Stevenson died in California NOT been proven by the CIR. Except for a mere allegation in his answer,
USA. Prior to his death, he executed a will which was duly probated in the which is not sufficient, the record is bereft of any evidence as to what
Superior Court of California instituting his wife Beatrice as his sole heiress to all English law says on the matter. In the absence of proof, the Court is
properties they acquired while in the Philippines.
justified, therefore, in indulging in what Wharton calls "processual
In the PH, ancillary administration proceedings were instituted before the CFI of presumption," in presuming that the law of England on this matter is the
Manila for the settlement of his estate. The ancillary administrator filed a same as our law.
preliminary estate and inheritance tax return with the reservation that the
properties of the estate should be appraised at their values six months after the (these are more on tax matters) For the claim of exemption of the estate
death of Stevenson. The Collector of Internal Revenue (CIR) assessed the estate and inheritance taxes, it was not allowed due to the absence of total
for taxes and these were properly paid by the estate. Subsequently, the ancillary reciprocity. With regard to the valuation of the parcel of land, the court held
administrator filed an amended return (1st amended return) in pursuance of his that it was proper since the valuation was based on the FMV and no
reservation made at the time of the preliminary return and for the purpose of contrary evidence was shown to prove otherwise. The Court recognized
availing certain exemption from the payment of inheritance taxes.
the reservation made by the administrator with regard to the valuation of
In the meantime, Beatrice assigned all her rights and interests to the Spouses the shares of stock. For the expenses, only the indebtedness was
Fisher. Thereafter, an amended return was again filed by the ancillary disallowed since the allowable deduction is only to the extent of the portion
administrator (2nd amended return) which includes additional claims for of the indebtedness equivalent to the proportion that the estate in the
exemptions and deductions. This last amended return also claimed that there was Philippines bears to the total estate wherever situated. Since there was
overpayment of tax and therefore the estate is entitled to refund. Thus, the no statement of the value of the estate situated outside the Philippines, no
Spouses Fisher filed a case before the CFI of Manila to recover the said amount. part of the indebtedness can be allowed to be deducted. For the claim of
This case was forwarded by the CFI to the Court of Tax appeals (CTA).
interest in the refund, it was not allowed since there is no law allowing
The CTA ruled that in determining the taxable net estate of the decedent, one-half such.
(½) of the net estate should be deducted therefrom as the share of the surviving
spouse in accordance with our law on conjugal partnership and in relation to DOCTRINE: (Case actually shows how doctrine of processual presumption
section 89 (c) of the National Internal revenue Code, contrary to the findings of applies) In the absence of proof to the Foreign Law, the Court is justified,
the CIR which argues that Law of England should apply which provides that all therefore, in indulging in what Wharton calls "processual presumption," in
properties acquired during the marriage pertain and belong Exclusively to presuming that the foreign law, on a certain matter is the same as our law (PH).
 and inheritance tax return in pursuance of his reservation made at the time of
(long digest but the other issues are actually tax related) filing of the preliminary return and for the purpose of availing of the
FACTS: exemption from payment of inheritance taxes.
1. This case relates to the determination and settlement of the hereditary estate
a. In this amended return the valuation of the 210,000 shares of stock
left by the deceased Walter G. Stevenson (Stevenson), and the laws
in the Mindanao Mother Lode Mines, Inc. was reduced from 0.38
applicable thereto.
per share, as originally declared, to P0.20 per share, or from a total
2. Stevenson was born in the Philippines on August 9, 1874 of British parents
valuation of P79,800.00 to P42,000.00. (This change in price per
and married in the City of Manila on January 23, 1909 to Beatrice Mauricia
share of stock was based by the ancillary administrator on the market
Stevenson (Beatrice) another British subject.
notation of the stock obtaining at the San Francisco California Stock
3. Stevenson died on February 22, 1951 in San Francisco, California, U.S.A.
Exchange six months from the death of Stevenson).
whereto he and Beatrice moved and established their permanent residence
b. In addition, the ancillary administrator made claim for several
since May 10, 1945.
deductions to the estate. (see end of digest for deductions claimed)
4. In his will executed in San Francisco on May 22, 1947, and which was duly
10. In the meantime, on December 1, 1952, Beatrice assigned all her rights and
probated in the Superior Court of California on April 11, 1951, Stevenson
interests in the estate to the spouses, Douglas and Bettina Fisher (Spouses
instituted his wife Beatrice as his sole heiress to several real and personal
Fisher).
properties acquired by the spouses while residing in the Philippines. (see end
11. On September 7, 1953, the ancillary administrator filed a second amended
of digest for the properties)
estate and inheritance tax return. This return declared the same assets of the
5. On May 22, 1951, ancillary administration proceedings were instituted in the
estate stated in the first amended return, except that it contained new claims
Court of First Instance of Manila for the settlement of the estate in the
for additional exemption and deduction to wit:
Philippines. In due time, Stevenson's will was duly admitted to probate by the
a. (1) deduction in the amount of P4,000.00 from the gross estate of
court and Ian Murray Statt was appointed ancillary administrator of the estate,
the decedent as provided for in Section 861 (4) of the U.S. Federal
who on July 11, 1951, filed a preliminary estate and inheritance tax return
Internal Revenue Code which the ancillary administrator averred
with the reservation of having the properties declared therein finally
was allowable by way of the reciprocity granted by Section 122 of
appraised at their values six months after the death of Stevenson.
the National Internal Revenue Code; and
6. Preliminary return was made by the ancillary administrator in order to secure
b. (2) exemption from the imposition of estate and inheritance taxes on
the waiver of the Collector of Internal Revenue on the inheritance tax due on
the 210,000 shares of stock in the Mindanao Mother Lode Mines,
the 210,000 shares of stock in the Mindanao Mother Lode Mines Inc. which
Inc. also pursuant to the reciprocity proviso of Section 122 of the
the estate then desired to dispose in the United States.
National Internal Revenue Code.
7. Acting upon said return, the Collector of Internal Revenue accepted the
12. In this last return, the estate claimed that it was liable only for the amount of
valuation of the personal properties declared therein, but increased the
P525.34 for estate tax and P238.06 for inheritance tax and that, as a
appraisal of the two parcels of land located in Baguio City by fixing their fair
consequence, it had overpaid the government. The refund of the amount of
market value in the amount of P52.200.00, instead of P43,500.00.
P15,259.83, allegedly overpaid, was accordingly requested by the estate. The
8. After allowing the deductions claimed by the ancillary administrator for
Collector denied the claim.
funeral expenses in the amount of P2,000.00 and for judicial and
13. For such reason, action was commenced in the Court of First Instance of
administration expenses in the sum of P5,500.00, the Collector assessed the
Manila by the Spouses Fisher, as assignees of Beatrice, for the recovery of
estate the amount of P5,147.98 for estate tax and P10,875,26 or inheritance
said amount. The case was forwarded to the Court of Tax Appeals which
tax, or a total of P16,023.23. Both of these assessments were paid by the estate
court, after hearing, rendered decision the dispositive portion of which reads
on June 6, 1952. as follows:
9. On September 27, 1952, the ancillary administrator filed an amended estate
 In fine, we are of the opinion and so hold that: (a) the one-half (½) share of the City and the 210,000 shares of stock in the Mindanao Mother Lode Mines,
surviving spouse (Beatrice) in the conjugal partnership property, as diminished Inc., were correctly appraised by the lower court – for the parcels of land,
by the obligations properly chargeable to such property, should be deducted YES, there was proper valuation, but with regard to the shares, NO, because
from the net estate of the deceased Walter G. Stevenson, pursuant to Section 89- the court should have respected the reservation made by the ancillary
C of the National Internal Revenue Code; (b) the intangible personal property administrator
belonging to the estate of said Stevenson is exempt from inheritance tax, pursuant to 5. Whether or not the estate is entitled to the following deductions: P8,604.39
the provision of section 122 of the National Internal Revenue Code in relation to the for judicial and administration expenses; P2,086.52 for funeral expenses;
California Inheritance Tax Law but decedent's estate is not entitled to an exemption P652.50 for real estate taxes; and P10,0,22.47 representing the amount of
of P4,000.00 in the computation of the estate tax; (c) for purposes of estate and indebtedness allegedly incurred by the decedent during his lifetime -
inheritance taxation the Baguio real estate of the spouses should be valued at 6. Whether or not the estate is entitled to the payment of interest on the amount
P52,200.00, and 210,000 shares of stock in the Mindanao Mother Lode Mines, Inc. it claims to have overpaid the government and to be refundable to it – NO,
should be appraised at P0.38 per share (as opposed to the P0.20/share stated in the there is no statute authorizing the payment of such interest
second amended return); and (d) the estate shall be entitled to a deduction of
P2,000.00 for funeral expenses and judicial expenses of P8,604.39.
RULING: WHEREFORE, as modified in the manner heretofore indicated, the
14. From such decision, both the CIR and the Spouses Fisher appealed before the judgment of the lower court is hereby affirmed in all other respects not inconsistent
herewith.
SC.
RATIO:
ISSUE/s: (nos. 2-6 are more related to tax)
First Issue (IMPT)
1. Whether or not, in determining the taxable net estate of the decedent,
1. In deciding the first issue, the lower court applied a well-known doctrine in
one-half (½) of the net estate should be deducted therefrom as the share
our civil law that in the absence of any ante-nuptial agreement, the
of tile surviving spouse in accordance with our law on conjugal
contracting parties are presumed to have adopted the system of conjugal
partnership and in relation to section 89 (c) of the National Internal
partnership as to the properties acquired during their marriage.
revenue Code – YES, because the foreign law of England was not proven
2. CONTENTIONS OF THE CIR: The application of this doctrine to the
and therefore the doctrine of processual presumption should apply,
instant case is being disputed, however, by petitioner Collector of Internal
which presumes that the foreign law is the same as our domestic law
Revenue, who contends:
2. Whether or not the estate can avail itself of the reciprocity proviso embodied
1. that pursuant to Article 124 of the New Civil Code37, the property
in Section 122 of the National Internal Revenue Code granting exemption
relation of the spouses Stevensons ought not to be determined by the
from the payment of estate and inheritance taxes on the 210,000 shares of
Philippine law, but by the national law of the decedent husband, in
stock in the Mindanao Mother Lode Mines Inc. – NO, because there is no
this case, the law of England.
total reciprocity with regard to the transfer taxes in PH and California
2. It is alleged by the CIR that English laws do not recognize legal
3. Whether or not the estate is entitled to the deduction of P4,000.00 allowed by
partnership between spouses, and that what obtains in that
Section 861, U.S. Internal Revenue Code in relation to section 122 of the
jurisdiction is another regime of property relation, wherein all
National Internal Revenue Code – NO, because it is in the nature of a
properties acquired during the marriage pertain and belong
deduction in the foreign country, not an exemption, in which reciprocity can
Exclusively to the husband.
be availed of.
3. In further support of his stand, the CIR cites Article 16 of the New
4. Whether or not the real estate properties of the decedent located in Baguio
Civil Code38 to the effect that in testate and intestate proceedings,

37 (2) If the husband is a foreigner and the wife is a citizen of the Philippines, the laws of the
Art. 124. If the marriage is between a citizen of the Philippines and a foreigner, whether
celebrated in the Philippines or abroad, the following rules shall prevail: husband's country shall be followed, without prejudice to the provisions of this Code with regard
(1) If the husband is a citizen of the Philippines while the wife is a foreigner, the provisions of this to immovable property. (1325a)
Code shall govern their relations;
38
Art. 16. Real property as well as personal property is subject to the law of the country where
it is stipulated.
 the amount of successional rights, among others, is to be determined since the provision is limited to marriages between a foreigner and a
by the national law of the decedent. Filipino, but in this case, they were both foreigners). BUT, as correctly
3. In this connection, let it be noted that since the marriage of the Stevensons in observed by the Tax Court, the pertinent English law that allegedly vests in
the Philippines took place in 1909, the applicable law is Article 1325 of the the decedent husband full ownership of the properties acquired during the
old Civil Code39 and not Article 124 of the New Civil Code which became marriage has NOT been proven by the CIR. Except for a mere allegation
effective only in 1950. It is true that both articles adhere to the so-called in his answer, which is not sufficient, the record is bereft of any evidence
nationality theory of determining the property relation of spouses where one as to what English law says on the matter. In the absence of proof, the
of them is a foreigner and they have made no prior agreement as to the Court is justified, therefore, in indulging in what Wharton calls
administration disposition, and ownership of their conjugal properties. In "processual presumption," in presuming that the law of England on this
such a case, the national law of the husband becomes the dominant law in matter is the same as our law.
determining the property relation of the spouses. There is, however, a 6. Nor do we believe CIR can make use of Article 16 of the New Civil Code
difference between the two articles in that Article 124 of the new Civil (art. 10, old Civil Code) to bolster his stand. A reading of Article 10 of the
Code expressly provides that it shall be applicable regardless of whether old Civil Code, which incidentally is the one applicable, shows that it does
the marriage was celebrated in the Philippines or abroad, while Article NOT encompass or contemplate to govern the question of property relation
1325 of the old Civil Code is limited to marriages contracted in a foreign between spouses (which was the issue in this case). Said article distinctly
land. speaks of amount of successional rights and this term, in speaks in our
4. It must be noted, however, that what has just been said refers to mixed opinion, properly refers to the extent or amount of property that each heir is
marriages between a Filipino citizen and a foreigner. In the instant case, both legally entitled to inherit from the estate available for distribution. It needs to
spouses are foreigners who married in the Philippines. Manresa, in his be pointed out that the property relation of spouses, as distinguished
Commentaries, has this to say on this point: from their successional rights, is governed differently by the specific and
express provisions of Title VI, Chapter I of our new Civil Code (Title III,
The rule established in art. 1325, refers to the capitulations granted in Spain and
Chapter I of the old Civil Code.) We, therefore, find that the lower court
among Spaniards. Art. 1325, to those held abroad when one of the spouses is Spanish.
correctly deducted the half of the conjugal property in determining the
As for the rule coming when two foreigners are married in Spain, or two
Spaniards abroad, in the first case, the country's legislation must be observed, to
hereditary estate left by the deceased Stevenson.
which they belong, and in the second case, to the general rules set out in the articles
9 and 10 of our Code. (translated from Spanish) Second Issue
1. On the second issue, CIR disputes the action of the Tax Court in the
5. [IMPT] If we adopt the view of Manresa, the law determinative of the exempting the estate from paying inheritance tax on the 210,000 shares of
property relation of the Stevensons, married in 1909, would be the stock in the Mindanao Mother Lode Mines, Inc. in virtue of the reciprocity
English law even if the marriage was celebrated in the Philippines, both proviso of Section 122 of the National Internal Revenue Code, in relation to
of them being foreigners (even if Art. 1325 was the provision that could Section 13851 of the California Revenue and Taxation Code, on the ground
have been applicable to them at that time, nonetheless, it would NOT apply that:

However, intestate and testamentary successions, both with respect to the order of succession should not make any statement or stipulation with respect to their property, it shall be
and to the amount of successional rights and to the intrinsic validity of testamentary provisions, understood, when the husband is a Spaniard, that he marries under the system of the legal
shall be regulated by the national law of the person whose succession is under consideration, conjugal partnership, and when the wife is a Spaniard, that she marries under the system of law
whatever may be the nature of the property and regardless of the country wherein said property in force in the husband's country, all without prejudice to the provisions of this code with respect
may be found. (10a) to real property. .
39
ART. 1325. Should the marriage be contracted in a foreign country, between a Spaniard and
a foreign woman or between a foreigner and a Spanish woman, and the contracting parties
 a. The said proviso of the California Revenue and Taxation Code has is, under our law, under obligation to pay an estate tax? Upon the other hand,
not been duly proven by the respondents; and if we exempt the Californian from paying the estate tax, we do not thereby
b. There is no "total" reciprocity between the Philippines and the state entitle a Filipino to be exempt from a similar estate tax in California because
of California in that while the former exempts payment of both under the Federal Law, which is equally enforceable in California he is bound
estate and inheritance taxes on intangible personal properties, the to pay the same, there being no reciprocity recognized in respect thereto. In
latter only exempts the payment of inheritance tax.. both instances, the Filipino citizen is always at a disadvantage. We do not
2. FOR THE 1ST ARGUMENT: To prove the pertinent California law, Attorney believe that our legislature has intended such an unfair situation to the
Allison Gibbs, counsel for the Spouses Fisher, testified that as an active detriment of our own government and people. We, therefore, find and declare
member of the California Bar since 1931, he is familiar with the revenue and that the lower court erred in exempting the estate in question from payment
taxation laws of the State of California. When asked by the lower court to of the inheritance tax.
state the pertinent California law as regards exemption of intangible personal
properties, the witness cited article 4, section 13851 (a) and (b) of the Third Issue
California Internal and Revenue Code as published in Derring's California 5. With respect to the question of deduction or reduction in the amount of
Code, a publication of the Bancroft-Whitney Company inc. And as part of P4,000.00 based on the U.S. Federal Estate Tax Law which is also being
his testimony, a full quotation of the cited section was offered in evidence as claimed by the estate, we uphold and adhere to our ruling in the Lara case
Exhibits "V-2" by the respondents. (supra) that the amount of $2,000.00 allowed under the Federal Estate Tax
3. FOR THE 2ND ARGUMENT: It is clear from both these quoted provisions Law is in the nature of a deduction and not of an exemption regarding which
(see end of digest for the provisions) that the reciprocity must be total, that reciprocity cannot be claimed under the provision of Section 122 of our
is, with respect to transfer or death taxes of any and every character, in the National Internal Revenue Code. Nor is reciprocity authorized under the
case of the Philippine law, and to legacy, succession, or death taxes of any Federal Law.
and every character, in the case of the California law. Therefore, if any of the
two states collects or imposes and does not exempt any transfer, death, Fourth Issue
6. VALUATION OF THE PARCELS OF LAND: properties are required to
legacy, or succession tax of any character, the reciprocity does not work. This
be appraised at their fair market value and the assessed value thereof
is the underlying principle of the reciprocity clauses in both laws. shall be considered as the fair market value only when evidence to the
4. In the Philippines, upon the death of any citizen or resident, or non-resident contrary has not been shown. After all review of the record, we are satisfied
with properties therein, there are imposed upon his estate and its settlement, that such evidence exists to justify the valuation made by the CIR (52,200
both an estate and an inheritance tax. Under the laws of California, only php) which was sustained by the tax court.
inheritance tax is imposed. On the other hand, the Federal Internal Revenue 7. VALUATION OF THE SHARES OF STOCK: we find merit in the ancillary
Code imposes an estate tax on non-residents not citizens of the United States, administrator’s contention that the said shares of stock commanded a lesser
value at the Manila Stock Exchange six months after the death of Stevenson
but does not provide for any exemption on the basis of reciprocity.
(.325 at the time of death) It should be noted that the petitioner and the
Applying these laws in the manner the Court of Tax Appeals did in the instant Tax Court valued each share of stock of P.38 on the basis of the
case, we will have a situation where a Californian, who is non-resident in the declaration made by the estate in its preliminary return. Patently, this
Philippines but has intangible personal properties here, will be the subject to should not have been the case, in view of the fact that the ancillary
the payment of an estate tax, although exempt from the payment of the administrator had reserved and availed of his legal right to have the
inheritance tax. This being the case, will a Filipino, non-resident of properties of the estate declared at their fair market value as of six
California, but with intangible personal properties there, be entitled to the months from the time the decedent died.
exemption clause of the California law, since the Californian has not been
Fifth Issue
exempted from every character of legacy, succession, or death tax because he 8. In connection with the deduction of P652.50 representing the amount of
 realty taxes paid in 1951 on the decedent's two parcels of land in Baguio City, denied in line with our recent decision in Collector of Internal Revenue v. St.
which respondents claim was disallowed by the Tax Court, we find that this Paul's Hospital (G.R. No. L-12127, May 29, 1959) wherein we held that, "in
claim has in fact been allowed. What happened here, which a careful review the absence of a statutory provision clearly or expressly directing or
authorizing such payment, and none has been cited by respondents, the
of the record will reveal, was that the Tax Court, in itemizing the liabilities
National Government cannot be required to pay interest."
of the estate, viz:
1) Administrator's fee P1,204.34

2) Attorney's fee 6,000.00 PROPERTIES

Gross Estate
3) Judicial and Administration expenses as of August 9, 1952 2,052.55
Real Property
Total P9,256.89 2 parcels of land in Baguio, covered by T.C.T. Nos. 378 and 379
added the P652.50 for realty taxes as a liability of the estate, to the P1,400.05 P43,500.00
for judicial and administration expenses approved by the court, making a total Personal Property
of P2,052.55, exactly the same figure which was arrived at by the Tax Court (1) 177 shares of stock of Canacao Estate at P10.00 each
for judicial and administration expenses. Hence, the difference between the 1,770.00
total of P9,256.98 allowed by the Tax Court as deductions, and the P8,604.39 (2) 210,000 shares of stock of Mindanao Mother Lode Mines, Inc. at P0.38 per share
as found by the probate court, which is P652.50, the same amount allowed 79,800.00
for realty taxes. An evident oversight has involuntarily been made in omitting (3) Cash credit with Canacao Estate Inc.
the P2,000.00 for funeral expenses in the final computation. This amount has 4,870.88
been expressly allowed by the lower court and there is no reason why it (4) Cash, with the Chartered Bank of India, Australia & China 851.97
should not be.
9. We come now to the other claim of respondents that pursuant to section 89(b) DEDUCTIONS
(1) in relation to section 89(a) (1) (E) and section 89(d), National Internal Funeral expenses ($1,04326) P2,086.52
Revenue Code, the amount of P10,022.47 should have been allowed the
estate as a deduction, because it represented an indebtedness of the decedent Judicial Expenses:
incurred during his lifetime. However, the allowable deduction is only to the
extent of the portion of the indebtedness which is equivalent to the proportion (a) Administrator's Fee P1,204.34
that the estate in the Philippines bears to the total estate wherever situated.
Stated differently, if the properties in the Philippines constitute but 1/5 of the (b) Attorney's Fee 6.000.00
entire assets wherever situated, then only 1/5 of the indebtedness may be
(c) Judicial and Administration expenses as of
deducted. But since, as heretofore adverted to, there is no statement of the August 9, 1952 1,400.05
value of the estate situated outside the Philippines, no part of the indebtedness
can be allowed to be deducted, pursuant to Section 89, letter (d), number (1) 8,604.39
of the Internal Revenue Code. For the reasons thus stated, we affirm the ruling
Real Estate Tax for 1951 on Baguio real properties
of the lower court disallowing the deduction of the alleged indebtedness in (O.R. No. B-1 686836) 652.50
the sum of P10,022.47.
Claims against the estate:
($5,000.00) P10,000.00 P10,000.00
Sixth Issue
10. Respondent's claim for interest on the amount allegedly overpaid, if any
actually results after a recomputation on the basis of this decision is hereby Plus: 4% int. p.a. from Feb. 2 to 22, 1951 22.47 10,022.47
 006 PARDO v. REPUBLIC (Arcenas) a. Lino Gutierrez (GUTIERREZ), a respectable citizen who has
January 23, 1950 | Tuason, J. | Ascertainment and Proof of Foreign Law intimately PARDO for 27 years, having had business relations with
him, conformed the PARDO’s testimony.
2. CFI RULING: PARDO is entitled to become a Filipino citizen
PETITIONER/S: In the matter of the petition of Vicente Rosal Pardo to be
3. Government is contesting the application on the following grounds:
admitted a citizen of the Philippines. VICENTE ROSAL PARDO
a. Ground 1: that PARDO is unable to speak and write any of the
RESPONDENTS: THE REPUBLIC OF THE PHILIPPINES
principal Filipino languages to which PARDO testified that he
knows enough tagalog to be understood.
SUMMARY: Vicente Pardo is a Spanish citizen born in Spain but resided in the
b. Ground 2: Sufficiency of the evidence on whether the laws of
Philippines since 1905. He is married to a Filipina and is presently employed in
Spain grant Filipinos the right to become naturalized citizens of
Manila. Pardo is applying for Filipino Citizenship. CFI affirmed Pardo’s
that country
naturalization, declaring him a Filipino citizen. However, the government contested
4. CFI APPEAL RULING:
his application on 2 grounds: first, Pardo is unable to speak and write in principal
a. Ground 1: PARDO can speak in Filipino as court is satisfied upon
Filipino languages and second, insufficient evidence on whether the Laws of Spain
hearing PARDO correctly translate the Spanish phrase40
grants Filipinos the right to become naturalized citizens of Spain. CFI ruled that:
i. That PARDO arrived in the PH when he was only ten years
yes, Pardo can speak Filipino since he has been living 44 years in the PH
old and has lived here 44 years continuously except for a
continuously, except for a few visits to Spain and by virtue of his work where he
few months visit in Spain
uses Tagalog in their daily intercourses and on the second ground: Pardo presented
ii. Mingling and dealing by reason of his work with people
a certificate signed by the CONSUL GENERAL OF SPAIN IN THE
who use Tagalog in their daily intercourse lends credence
PHILIPPINES stating that articles 17 and 225 of the Spanish Civil code provide
in his testimony that he has acquired a good working
that Filipinos are eligible to Spanish citizenship. The issue before the court is
knowledge of that language.
whether the certification of the supposed naturalization laws of Spain made by the
iii. PARDO owned or managed two stores successively on the
Spanish Consul General constitutes competent proof of that law. The court held
Escolta, and lately he has been a foreman and
YES. Rule 1342, entitled "Applicability of the Rules," provides that "These rules
warehouseman at Soriano & Co.
shall not apply to land registration, cadastral and election cases, naturalization and
b. (IMPT) Ground 2: PARDO introduced a certificate signed by the
insolvency proceedings, and other cases not herein provided for, except by analogy
Consul General of Spain in the Philippines, stating that in
or in a suppletory character and whenever practicable and convenience. By reason
accordance with articles 17 and 225 of the Spanish Civil Code:
of this provision, literal adherence to the Rules of Court, which include rules of
Filipinos are eligible to Spanish citizenship in Spain.
evidence, is not obligatory in a proceeding like that under the Philippine law is
i. Article 17 provides that foreigners who have obtained a
judicial in character. Strict compliance with the process prescribed by statute, if
certificate of naturalization and those who have not
there were one, would be essential. (See doctrine)
obtained such certificate but have acquired domicile in any
town of the Monarchy are Spaniards.
DOCTRINE: Evidence of the law of a foreign country or reciprocity regarding the
ii. No discrimination being made in these provisions, they
acquisition of citizenship, although not meeting the prescribed rule of practice by
apply to persons of any nationality.
section 41 of Rule 123, may be allowed and used as basis for a favorable action if
5. The portion of the PARDO’s brief should not be taken isolatedly and at face
the court is satisfied of the authenticity of the written proof offered.
value.
SPAIN v. PH law on naturalization 6. As the Spanish Civil Code has been and still is the basic code in force of the
FACTS: PH, articles 17 etc may be regarded as matters known to judges of the PH by
1. Vicente Rosal Pardo (PARDO) is a Spanish citizen born in Spain in 1895 and reason of their judicial functions and nay be judicially recognized by them
residing in the Philippines since 1905, where he married a Filipino woman without the introduction of proof.41
and where he is at present employed, in Manila, with an annual salary of
P4,800 applied for Filipino citizenship.

40 41
He venido residiendo en Filipinas por el periodo de 36 años Section 5, Rule 123
 a. E.g. mere authentication of the Chinese Naturalization Law by the suppletory character and whenever practicable and
Chinese Consulate General of Manila has been held to be competent convenience.
proof of that law. 5. By reason of this provision, literal adherence to the Rules of Court, which
7. Government filed a MR (case under review) include rules of evidence, is not obligatory in a proceeding like that under the
Philippine law is judicial in character
ISSUE/s: whether the certification of the supposed naturalization laws of Spain a. Strict compliance with the process prescribed by statute, if there
made by the Spanish Consul General constitutes competent proof of that law. YES. were one, would be essential,
Accordingly, evidence of the law of a foreign country or reciprocity regarding the b. But in this case, when there is no specific procedure is indicated
acquisition of citizenship, although not meeting the prescribed rule of practice by in the premises, it is only necessary that the merits of the petition
section 41 of Rule 123, may be allowed and used as basis for a favorable action if the be passed on and a decision reached on a far consideration of
court is satisfied of the authenticity of the written proof offered. the evidence on satisfactory proof.
c. Accordingly, evidence of the law of a foreign country or
RULING: The motion for reconsideration is therefore denied. reciprocity regarding the acquisition of citizenship, although
not meeting the prescribed rule of practice by section 41 of Rule
RATIO: 123, may be allowed and used as basis for a favorable action if
1. SC cites Jose Leelin vs. Republic of the Philippines, Bienvenido Yap vs. The the court is satisfied of the authenticity of the written proof
Solicitor General, Yee Boo Mann vs. Republic of the Philippines, and Jose offered.
Go alias Joseph Gotianuy vs. Anti-Chinese League of the Philippines and
Felipe Fernandez
2. The decisions referred to seem to have been misread.
a. In Yap vs. Solicitor General, there was nothing in that decision
which would show that the certificate or authentication was made
by a Philippine diplomatic or consular representative in China.
b. In Jose Leelin vs. Republic of the Philippines, "in previous cases, a
translation of the Chinese Naturalization Law, made and certified to
be correct by the Chinese Consulate General in Manila, was
admitted and considered efficient evidence to establish that the laws
of China permit Filipinos to become citizens of that country.
c. In Yee Boo Mann vs. Republic of the Philippines, the petitioner
introduced in evidence a translation of the Chinese Naturalization
Law, certified to be correct by the Chinese Consul General in
Manila…SC already accepted it as fact in previous naturalization
cases that the laws of China permit Filipinos to naturalize in that
country."
3. SC held that a copy of a foreign law certified only by the local consul of
the applicant's country does not conform to the requirement concerning
the certification and authentication of such law (sec. 41, Rule 123).
4. But the case at bar and the cases cited therein as precedents are not
governed by the Rules of the Court.
a. Rule 1342, entitled "Applicability of the Rules," provides that
"These rules shall not apply to land registration, cadastral and
election cases, naturalization and insolvency proceedings, and
other cases not herein provided for, except by analogy or in a
 007 PCIB v. Escolin (Siapno edited by Lindon) neither the evidence submitted by the parties appeared to be adequate enough
March 29, 1974 | Barredo, J. | Chain of Custody for it to render an intelligent comprehensive and just resolution. No clear and
reliable proof of what in fact the possibly applicable laws of Texas are, was
PETITIONER: PCIB presented It should be borne in mind that the question of what are the laws of
RESPONDENT: Hon. Escolin, Magno Texas governing the matters herein issue is, in the first instance, one of fact,
x- - - - - - - - - -x not of law. Elementary is the rule that foreign laws may not be taken
PETITIONER: Testate Estate of Jane Hodges judicial notice of and have to be proven like any other fact in dispute
RESPONDENT: Carles, et. al. between the parties in any proceeding, with the rare exception in instances
when the said laws are already within the actual knowledge of the court, such as
SUMMARY: Charles & Linnie Hodges, both Texan nationals, were domiciled when they are well and generally known or they have been actually ruled upon
in Iloilo City for around 50 years. In Linnie’s will she provided that she in other cases before it and none of the parties concerned do not claim
bequeaths remainder of estate to spouse. Mrs. Hodges died first. Mr. Hodges otherwise.
appointed as EXECUTOR. In Financial Statements submitted before the court, But wharever happens, PCIB can't claim that the estate of Linney is not entitled
he made statements that the estate of Mrs. Hodges is 1/2 of conjugal estate. He to at least 1/4 of conjugal property, they having argued that it is so which
allegedly renounced his inheritance in a tax declaration in US. For 5 years amounts to judicial admission.
before his death, he failed to make accounting. It was incumbent upon Charles’
to liquidate the conjugal partnership in order for the “rest, residue, and
remainder” to be determined and distributed upon his death to Linnie’s DOCTRINE:
surviving siblings, pursuant to her will. Charles died. Initially, Magno, was the GR – Foreign Law, as a matter of fact, must be alleged and proven.
administratrix of both spouse's estate. Later, PCIB became the administrator of EXC - Where the foreign law is within the actual knowledge of the court, such
Charles’ estate, asserting a claim to all of his estate, including those as when the law is generally well-known, had been ruled upon in previous cases
properties/assets that passed to him upon Linnie Jane’s death. During probate before it, and none of the parties claim otherwise, the court may take judicial
proceedings, the administrators differed on whether Philippine or Texan law notice of the foreign law.
should govern. Particularly, they differed as to how much of the conjugal estate
should go to the siblings of Linnie.
PCIB: claims that inasmuch as Linnie was a resident of the Philippines at the
time of her death, under Article 16 of the Civil Code, construed in relation to the FACTS:
pertinent laws of Texas and the principle of renvoi, what should be applied here
1. Charles Newton Hodges and Linnie Jane Hodges were originally from
should be the rules of succession under the Civil Code, and, therefore, her estate
could consist of no more than 1/4 of the said conjugal properties, the other
Texas, USA. During their marriage, they had acquired and
fourth being, as already explained, the legitime of her husband (Art. 900) which accumulated considerable assets and properties in the Philippines and
she could not have disposed of nor burdened with any condition (Art. 872). in Oklahoma and Texas in the US. They both lived, worked and were
Avelina: denied that Linnie died a resident of the Philippines, since allegedly she domiciled in Iloilo City for around 50 years.
never changed nor intended to change her original residence of birth in Texas, 2. In the last will and testament of Linnie Jane Hodges, herein petitioner
United States of America, and contends that, anyway, regardless of the question Charles Newton Hodges was directed to have the right to manage,
of her residence, she being indisputably a citizen of Texas, under said Article 16 control use and enjoy the estate of deceased Linnie Jane Hodges, in
of the Civil Code, the distribution of her estate is subject to the laws of said State the same way, a provision was placed in paragraph two, the following:
which, according to her, do not provide for any legitime, hence, Linnie’s brothers "I give, devise and bequeath all of the rest, residue and remainder of
and sisters are entitled to the remainder of the whole of her share of the conjugal
my estate, to my beloved husband, Charles Newton Hodges, to have
partnership properties consisting of one-half thereof.
and (to) hold unto him, my said husband, during his natural lifetime."
ISSUE: WON Texan or Philippine law will govern the legitime of Charles – 3. Charles Hodges was engaged in the business of buying and selling
No answer yet, remanded. The Court cannot decide on the claims, though, for personal and real properties, and do such acts which petitioner may
think best.
 4. An Urgent Ex-Parte Motion to Allow or Authorize Petitioner to 12. Linnie Jane’s will should be governed by Philippine Law, with
Continue the Business in which he was Engaged and to Perform Acts respect to the order of succession, the amount of successional rights,
which he had been doing while Deceased was Living was filed praying and the intrinsic validity of its testamentary provisions:
that petitioner Charles Hodges be allowed or authorized to continue a. Linnie intended Philippine laws to govern her Will
the business in which he was engaged and to perform acts which he b. Article 16, CC, provides that "the national law of the person whose
had been doing while deceased Linnie Jane Hodges was living. The succession is under consideration, whatever may be the nature of
Hon. Court approved the motion. the property and regardless of the country wherein said property may
5. Accordingly, it became incumbent upon Hodges, as executor of his be found, shall prevail”. However, the Conflict of Law of Texas,
wife's will, to duly liquidate the conjugal partnership, half of which which is the "national law" of the testatrix, Linnie Jane Hodges,
constituted her estate, in order that upon the eventuality of his death, provide that the domiciliary law (Philippine law) should govern
"the rest, residue and remainder" thereof could be determined and the testamentary dispositions and successional rights over
correspondingly distributed or divided among her brothers and sisters. movables, and the law of the situs of the property (also Philippine
And it was precisely because no such liquidation was done. law as to properties located in the Philippines) as regards
6. However, Charles died in without having liquidated Linnie’s estate, immovables.
which includes her share in the conjugal partnership. c. Thus applying the "Renvoi Doctrine", as approved and applied in
7. A longtime employee of the Hodges, Avelina Magno, was appointed the Christensen case (1963), Philippine law should apply.
Administratrix (for Linnie’s estate) and a Special Administratrix (for d. Under Philippine and Texas law, the conjugal or community estate
Charles’). Magno was appointed, but later Harold Davies of spouses shall, upon dissolution, be divided equally between them.
(representative of Charles’ heirs in the US) was designated Co-Special Thus, upon Linnie’s death, ½ of the entirety of the assets of the
Administrator, who was then replaced by one Joe Hodges, Charles’ Hodges spouses constituting their conjugal estate pertained
nephew. One Atty. Mirasol was also appointed as co-administrator, automatically to Charles, not by way of inheritance, but in his own
and an order of probate and letters of administration were issued to right as partner in the conjugal partnership.
Hodges and Mirasol. e. The other one-half (1/2) portion forming part of Linnie’s estate,
8. SC was confused about the gaps in the facts, convinced that the parties cannot, under a clear and specific provision of her Will, be enhanced
representing both estates were involved in a modus operandi to settle or increased by income, earnings, rents, or emoluments accruing
money matters (a settlement with records the Court never saw)— after her death. “All rents, emoluments and income from said estate
which, however, went wary, with more and more heirs from the US shall belong to him (C. N. Hodges) and he is further authorized to
flocking to the Iloilo shores, and lawyers filing their respective claims use any part of the principal of said estate as he may need or desire."
for retainer fees. f. Clearly, therefore, immediately upon the death of Linnie Jane
9. Later, PCIB became the administrator of Charles’ estate, asserting a Hodges, C. N. Hodges was the owner of at least 3/4 or 75% percent
claim to all of his estate, including those properties/assets that passed of all of the conjugal assets of the spouses, 50% by way of conjugal
to him upon Linnie Jane’s death. partnership share and 1/4 or 25% by way of inheritance and legitime)
10. Magno opposed this, as Linnie Jane’s other heirs (the HIGDONS) plus all "rents, emoluments and income" accruing to said conjugal
would be prejudiced, so she continued acting in her capacity as estate from the moment of Linnie Jane Hodges' death.
administrator (entering into sales and other such conveyances). g. In his capacity as sole heir and successor to Linnie’s estate, Charles
11. For these acts, the PCIB dismissed her as an employee of Charles’ appropriated to himself the entirety of her estate. He operated all the
estate, to which she responded by locking up the premises being used assets, engaged in business and performed all acts in connection with
by PCIB as offices, which were among the estate’s properties. the entirety of the conjugal estate, in his own name alone, just as he
had been operating, engaging and doing while the late Linnie Jane
PCIB’s Claims Hodges was still alive. Upon his death on December 25, 1962,
 therefore, all said conjugal assets were in his sole possession and
control, and registered in his name alone, not as executor, but as Remanded
exclusive owner of all said assets.
h. As the sole and exclusive heir, Charles did not need to liquidate the RULING:
estate. Neither was there any asset left to Linnie’s estate at the time
of Charles’ death, though Linnie’s estate may have referred to “all of RATIO:
the rest, residue and remainder of my estate” which would go to her 1. In the interest of justice, the parties should be allowed to present such
siblings in the event of Charles death. The provision is thus void and further evidence in relation to all these issues in a joint hearing of the
invalid at least as to Philippine assets. two probate proceedings herein involved. After all, the court a quo has
Avelina’s Claims not yet passed squarely on these issues, and it is best for all concerned
(At one point, even Linnie’s heirs wanted to have Avelina removed that it should do so in the first instance.
2. Relative to Our holding above that the estate of Mrs. Hodges cannot
from her capacity as administrator, but the lower court reversed its be less than the remainder of one-fourth of the conjugal partnership
earlier grant of the motion, on account of a previous injunction it properties, it may be mentioned here that during the deliberations, the
issued.) point was raised as to whether or not said holding might be
a. Linnie Jane merely gave Charles a life-estate or a usufruct over inconsistent with Our other ruling here also that, since there is no
all her estate, and gave a vested remainder-estate or the naked reliable evidence as to what are the applicable laws of Texas, U.S.A.
title over the same estate, to her relatives. “with respect to the order of succession and to the amount of
b. After Linnie’s death, Charles, as administrator and executor of successional rights” that may be willed by a testator which, under
the will, unequivocably and clearly through oral and written Article 16 of the Civil Code, are controlling in the instant cases, in
declarations and sworn public statements, renounced, view of the undisputed Texan nationality of the deceased Mrs.
disclaimed and repudiated his life-estate and usufruct. Hodges, these cases should be returned to the court a quo, so that
the parties may prove what said law provides, it is premature for
c. Since there was no separation or segregation of the interests of
Us to make any specific ruling now on either the validity of the
Linnie and Charles in the combined conjugal estate, as there has
testamentary dispositions herein involved or the amount of inheritance
been no such separation or segregation, and because of Charles’ to which the brothers and sisters of Mrs. Hodges are entitled.
repudiation, both interests have continually earned exactly the 3. It should be borne in mind that as above-indicated, the question of
same amount of rents, emoluments and income. what are the laws of Texas governing the matters herein issue is,
Summary: in the first instance, one of fact, not of law. Elementary is the rule
PCIB Magno that foreign laws may not be taken judicial notice of and have to
be proven like any other fact in dispute between the parties in any
proceeding, with the rare exception in instances when the said laws
The estate left by Mrs. Hodges < 1/2 of Texas law applicable,
are already within the actual knowledge of the court, such as when
her share in the conjugal estate (Apply wherein no system of they are well and generally known or they have been actually ruled
Philippine law), notwithstanding Art 16 legitime provided so upon in other cases before it and none of the parties concerned do not
of our Civil code which mandates the estate of Mrs. Hodges claim otherwise.
application of Texas law, Mr.Hodges could not be less than 4. The case Aznar vs. Garcia could not have been a reference to certain
being a citizen of Texas her share or >1/2 provisions regarding succession in the laws of Texas because of the
disparity in the material dates of that case and the present ones would
ISSUE/s: WON Philippine law governs the legitime of Charles – not permit the Court to indulge in the hazardous conjecture that said
 provisions have not been amended or changed in the meantime.
(Aznar can't be used to show what Texas law may contain, as
there's a time difference between this case and that case, thus the
Texas law might have changed in between the rulings)
5. In other words, since PCIB concedes that upon application of Article
16 of the Civil Code and the pertinent laws of Texas, the amount of
the estate in controversy is just as We have determined it to be, and
Magno is only claiming, on her part, that it could be more, PCIB may
not now or later pretend differently.
6. Nowhere in its pleadings, briefs and memoranda does PCIB maintain
that the application of the laws of Texas would result in the other heirs
of Mrs. Hodges not inheriting anything under her will. And since
PCIB’s representations in regard to the laws of Texas virtually
constitute admissions of fact which the other parties and the Court are
being made to rely and act upon, PCIB is “not permitted to contradict
them or subsequently take a position contradictory to or inconsistent
with them.”
7. It is now beyond controversy for all future purposes of these
proceedings that whatever be the provisions actually of the laws of
Texas applicable hereto, the estate of Mrs. Hodges is at least, one-
fourth of the conjugal estate of the spouses; the existence and
effects of foreign laws being questions of fact, and it being the position
now of PCIB that the estate of Mrs. Hodges, pursuant to the laws of
Texas, should only be one-fourth of the conjugal estate, such
contention constitutes an admission of fact, and consequently, it
would be in estoppel in any further proceedings in these cases to
claim that said estate could be less, irrespective of what might be
proven later to be actually the provisions of the applicable laws of
Texas;
 008 ZALAMEA vs. CA (Buenaventura) in the foreign country in which the record is kept, and authenticated by the seal of
Nov 18, 1993 | Nocon, J. | Proof of foreign law his office.
TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer
PETITIONER: Spouses Cesar and Suthira Zalamea and Liana Zalamea service agent, in her deposition that the Code of Federal Regulations of the Civil
RESPONDENTS: CA and Transworld Airlines Aeronautics Board allows overbooking. No official publication of said code was
SUMMARY: Petitioners-spouses Cesar Zalamea and Suthira Zalamea, and presented as evidence. Thus, respondent court’s finding that overbooking is
their daughter, Liana purchased 3 airline tickets from the Manila agent of specifically allowed by the US Code of Federal Regulations has no basis in fact.
respondent TransWorld Airlines, Inc. (TWA) for a flight to New York to LA. Even if the claimed U.S. Code of Federal Regulations does exist, the same is not
The tickets of petitioners-spouses were purchased at a discount of 75% applicable to the case at bar in accordance with the principle of lex loci contractus
while that of their daughter was a full fare ticket. All three tickets which require that the law of the place where the airline ticket was issued should
represented confirmed reservations. be applied by the court where the passengers are residents and nationals of the
Zalameas checked in but were placed on the wait-list because the number of forum and the ticket is issued in such State by the defendant airline. Since the
passengers who had checked in before them had already taken all the seats tickets were sold and issued in the Philippines, the applicable law in this case
available on the flight. Out of the 42 names on the wait list, the first 22 names would be Philippine law.
were eventually allowed to board the flight to Los Angeles, including petitioner TWA was also guilty of not informing its passengers of its alleged policy of
Cesar Zalamea. The two others were not able to fly. Those holding full-fare giving less priority to discounted tickets Neither did it present any argument of
tickets were given first priority among the wait-listed passengers. Mr. Zalamea, substance to show that petitioners were duly apprised of the overbooked condition
who was holding the full-fare ticket of his daughter, was allowed to board the of the flight or that there is a hierarchy of boarding priorities in booking
plane; while his wife and daughter, who presented the discounted tickets were passengers. Such conscious disregard of petitioners' rights makes respondent
denied boarding. TWA liable for moral damages. To deter breach of contracts by respondent TWA
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, in similar fashion in the future, we adjudge respondent TWA liable for exemplary
could not be accommodated because it was also fully booked. Thus, they were damages, as well.
constrained to book in another flight and purchased two tickets from American
Airlines. Upon their arrival in the Philippines, they filed an action for damages DOCTRINE:
based on breach of contract of air carriage before the RTC- Makati, which ruled in Foreign laws do not prove themselves nor can the courts take judicial notice of
favor of . CA held that moral damages are recoverable in a damage suit predicated them. Like any other fact, they must be alleged and proved. Written law may be
upon a breach of contract of carriage only where there is fraud or bad faith. Since evidenced by an official publication thereof or by a copy attested by the officer
it is a matter of record that overbooking of flights is a common and accepted having the legal custody of the record, or by his deputy, and accompanied with a
practice of airlines in the United States and is specifically allowed under the Code certificate that such officer has custody.
of Federal Regulations by the Civil Aeronautics Board, no fraud nor bad faith
could be imputed on TWA. Thus petitioners raised the case on petition for review FACTS:
on certiorari. 1. Spouses Cesar C. Zalamea and Suthira Zalamea, and their daughter, Liana
The issue in this case is WoN TWA acted with bad faith in overbooking the Zalamea, purchased 3 airline tickets from the Manila agent of respondent
flights, and would entitle Zalameas to Moral and Examplary damages. SC held TransWorld Airlines, Inc.(TWA) for a flight to New York to Los Angeles.
YES, there was no proof of the foreign law allowing overbooking. The tickets of Spouses were purchased at a discount of 75% while that of
their daughter was a full fare ticket. All three tickets represented confirmed
The U.S. law or regulation allegedly authorizing overbooking has never been reservations.
proved. Foreign laws do not prove themselves nor can the courts take judicial 2. While in New York, Zalameas received notice of the reconfirmation of their
notice of them. Like any other fact, they must be alleged and proved. Written law reservations for said flight. They checked in at 10:00 a.m., an hour earlier
may be evidenced by an official publication thereof or by a copy attested by the than the scheduled flight at 11:00 a.m. but were placed on the wait-list
officer having the legal custody of the record, or by his deputy, and accompanied because the number of passengers who had checked in before them had
with a certificate that such officer has custody. The certificate may be made by a already taken all the seats available on the flight. Liana Zalamea appeared
secretary of an embassy or legation, consul general, consul, vice-consul, or as the No. 13 on the wait-list while the two other Zalameas were listed as
consular agent or by any officer in the foreign service of the Philippines stationed "No. 34, showing a party of two." Out of the 42 names on the wait list, the
 first 22 names were eventually allowed to board the flight to Los Angeles, (3) P50,000.00 as exemplary damages;
including petitioner Cesar Zalamea. The two others, on the other hand, at (4) P50,000.00 as attorney's fees; and
No. 34, being ranked lower than 22, were not able to fly. (5) Costs of suit.
3. As it were, those holding full-fare tickets were given first priority among SO ORDERED.
the wait-listed passengers. Mr. Zalamea, who was holding the full-fare
ticket of his daughter, was allowed to board the plane; while his wife and RATIO:
daughter, who presented the discounted tickets were denied boarding.
According to Mr. Zalamea, it was only later when he discovered the he was 1. That there was fraud or bad faith on the part of respondent airline when it
holding his daughter's full-fare ticket. did not allow petitioners to board their flight for Los Angeles in spite of
4. Even in the next TWA flight to LA, Mrs. Zalamea and her daughter, could confirmed tickets cannot be disputed. The U.S. law or regulation allegedly
not be accommodated because it was also fully booked. Thus, they were authorizing overbooking has never been proved. Foreign laws do not
constrained to book in another flight and purchased two tickets from prove themselves nor can the courts take judicial notice of them. Like
American Airlines at a cost of $918.00 any other fact, they must be alleged and proved. Written law may be
5. Upon their arrival in the Philippines, they filed an action for damages based evidenced by an official publication thereof or by a copy attested by the
on breach of contract of air carriage before the RTC of Makati. RTC ruled officer having the legal custody of the record, or by his deputy, and
in favor of them and awarded actual and moral damages plus attorney’s accompanied with a certificate that such officer has custody. The
fees. certificate may be made by a secretary of an embassy or legation, consul
6. On appeal, CA held that moral damages are recoverable in a damage suit general, consul, vice-consul, or consular agent or by any officer in the
predicated upon a breach of contract of carriage only where there is fraud or foreign service of the Philippines stationed in the foreign country in which
bad faith. Since it is a matter of record that overbooking of flights is a the record is kept, and authenticated by the seal of his office.
common and accepted practice of airlines in the United States and is 2. Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather,
specifically allowed under the Code of Federal Regulations by the Civil its customer service agent that the Code of Federal Regulations of the Civil
Aeronautics Board, no fraud nor bad faith could be imputed on respondent Aeronautics Board allows overbooking. Aside from said statement, no
TransWorld Airlines. official publication of said code was presented as evidence. Thus,
7. Finally, it also held that there was no bad faith in placing petitioners in the respondent court's finding that overbooking is specifically allowed by the
wait-list along with 48 other passengers where full-fare first class tickets US Code of Federal Regulations has no basis in fact.
were given priority over discounted tickets. 3. Even if the claimed U.S. Code of Federal Regulations does exist, the same
8. CA modified the decision and eliminated the award of moral and exemplary is not applicable to the case at bar in accordance with the principle of lex
damages. loci contractus which require that the law of the place where the airline
9. Zalameas now go to the SC. ticket was issued should be applied by the court where the passengers are
residents and nationals of the forum and the ticket is issued in such State by
ISSUES: the defendant airline. Since the tickets were sold and issued in the
1. WON TWZ acted with bad faith in overbooking the flights, and would Philippines, the applicable law in this case would be Philippine law.
entitle Zalameas to Moral and Examplary damages. – YES, there was no 4. Existing jurisprudence explicitly states that overbooking amounts to bad
proof of the foreign law allowing overbooking. faith, entitling the passengers concerned to an award of moral damages.
5. In fact, existing jurisprudence abounds with rulings where the breach of
RULING: WHEREFORE, the petition is hereby GRANTED and the decision of the contract of carriage amounts to bad faith.
respondent Court of Appeals is hereby MODIFIED to the extent of adjudging 6. Even on the assumption that overbooking is allowed, respondent TWA is
respondent TransWorld Airlines to pay damages to petitioners in the following still guilty of bad faith in not informing its passengers beforehand that it
amounts, to wit: could breach the contract of carriage even if they have confirmed tickets if
(1) US$918.00 or its peso equivalent at the time of payment representing the price of there was overbooking. Respondent TWA should have incorporated
the tickets bought by Suthira and Liana Zalamea from American Airlines, to enable stipulations on overbooking on the tickets issued or to properly inform its
them to fly to Los Angeles from New York City; passengers about these policies so that the latter would be prepared for such
(2) P50,000.00 as moral damages; eventuality or would have the choice to ride with another airline.
7. Respondent TWA contends that Exhibit I, the detached flight coupon upon 12. In accordance with Article 2201, New Civil Code, respondent TWA should,
which were written the name of the passenger and the points of origin and therefore, be responsible for all damages which may be reasonably
destination, contained such a notice. An examination of Exhibit I does not attributed to the non-performance of its obligation.
bear this out. At any rate, said exhibit was not offered for the purpose of 13. Thus, instead of simply being refunded for the cost of the unused TWA
showing the existence of a notice of overbooking but to show that Exhibit I tickets, Zalameas should be awarded the actual cost of their flight from New
was used for flight 007 in first class of June 11, 1984 from New York to York to Los Angeles. On this score, we differ from the trial court's ruling
Los Angeles. which ordered not only the reimbursement of the American Airlines tickets
8. Moreover, respondent TWA was also guilty of not informing its but also the refund of the unused TWA tickets. To require both prestations
passengers of its alleged policy of giving less priority to discounted would have enabled petitioners to fly from New York to Los Angeles
tickets. While the petitioners had checked in at the same time, and held without any fare being paid.
confirmed tickets, yet, only one of them was allowed to board the plane ten 14. The award to petitioners of attorney's fees is also justified under Article
minutes before departure time because the full-fare ticket he was holding 2208(2) of the Civil Code which allows recovery when the defendant's act
was given priority over discounted tickets. The other two petitioners were or omission has compelled plaintiff to litigate or to incur expenses to protect
left behind. his interest. However, the award for moral damages and exemplary damages
9. It is respondent TWA's position that the practice of overbooking and the by the trial court is excessive in the light of the fact that only Suthira and
airline system of boarding priorities are reasonable policies, which when Liana Zalamea were actually "bumped off." An award of P50,000.00 moral
implemented do not amount to bad faith. But the issue raised in this case is damages and another P50,000.00 exemplary damages would suffice under
not the reasonableness of said policies but whether or not said policies were the circumstances obtaining in the instant case.
incorporated or deemed written on petitioners' contracts of carriage.
Respondent TWA failed to show that there are provisions to that effect.
Neither did it present any argument of substance to show that
petitioners were duly apprised of the overbooked condition of the flight
or that there is a hierarchy of boarding priorities in booking
passengers. It is evident that petitioners had the right to rely upon the
assurance of respondent TWA, thru its agent in Manila, then in New York,
that their tickets represented confirmed seats without any qualification. The
failure of respondent TWA to so inform them when it could easily have
done so thereby enabling respondent to hold on to them as passengers up to
the last minute amounts to bad faith. Evidently, respondent TWA placed its
self-interest over the rights of petitioners under their contracts of carriage.
10. Such conscious disregard of petitioners' rights makes respondent TWA
liable for moral damages. To deter breach of contracts by respondent TWA
in similar fashion in the future, we adjudge respondent TWA liable for
exemplary damages, as well.
11. CA erred in not ordering the refund of the American Airlines tickets
purchased and used by petitioners Suthira and Liana. The evidence shows
that petitioners Suthira and Liana were constrained to take the American
Airlines flight to Los Angeles not because they "opted not to use their TWA
tickets on another TWA flight" but because respondent TWA could not
accommodate them either on the next TWA flight which was also fully
booked. The purchase of the American Airlines tickets by petitioners
Suthira and Liana was the consequence of respondent TWA's unjustifiable
breach of its contracts of carriage with petitioners.
 09 Manufacturer Hanover Trust Co. and/or Chemical Bank v. April 18, 1995.
Guerrero (CELAJE) 2. On September 1, 1995, the Bank filed its Answer alleging, inter alia, that by
stipulation Guerrero’s account is governed by New York law and this law
G.R. No. 136804 | February 19, 2003 | Carpio, J. | Proof of Foreign Law
does not permit any of Guerrero’s claims except actual damages.
PETITIONER: Manufacturer Hanover Trust Co. and/or Chemical 3. Subsequently, the Bank filed a Motion for Partial Summary Judgment
Bank seeking the dismissal of Guerrero’s claims for consequential, nominal,
RESPONDENTS: Rafael Ma. Guerrero temperate, moral and exemplary damages as well as attorney’s fees on the
same ground alleged in its Answer. The Bank contended that the trial should
SUMMARY: Respondent Rafael Ma. Guerrero filed a complaint for damages be limited to the issue of actual damages..
against petitioner Manufacturers Hanover Trust Co. and/or Chemical Bank.
Petitioner Bank filed an answer, saying that respondent Guerrero's account is 4. The affidavit of Alyssa Walden, a New York attorney, supported the Bank’s
governed by New York Laws and that these laws do not permit respondent Motion for Partial Summary Judgment. Alyssa Walden’s affidavit ("Walden
Guerrero's claims for damages except actual damages. Petitioner Bank then filed affidavit" for brevity) stated that Guerrero’s New York bank account
a Motion for Partial Summary Judgment seeking the dismissal of Guerrero’s stipulated that the governing law is New York law and that this law bars all
claims for consequential, nominal, temperate, moral and exemplary damages on of Guerrero’s claims except actual damages. The Philippine Consular Office
the same ground alleged in its Answer. The Bank contended that the trial in New York authenticated the Walden affidavit.
should be limited to the issue of actual damages. To prove the existence of 5. The RTC denied the Bank’s Motion for Partial Summary Judgment. On
New York's laws on damages, the bank presented their attorney, Alyssa appeal, the CA sustained the RTC. The CA ruled that the Walden affidavit
Walden's affidavit which was attached to the motion. does not serve as proof of the New York law and jurisprudence relied on by
Issue: W/N the Walden affidavit sufficiently proved the New York's laws on the Bank to support its motion. The CA considered the New York law and
damages. No. The Bank’s intention in presenting the Walden affidavit is to jurisprudence as public documents defined in Section 19, Rule 132 of the
prove New York law and jurisprudence. However, because of the Bank's failure Rules on Evidence.
to comply with Section 24 of Rule 132 on how to prove a foreign law and 6. Thus, the Court of Appeals opined that the following procedure outlined in
decisions of foreign courts, the Walden affidavit did not prove the current state Section 24, Rule 132 should be followed in proving foreign law. The Court of
of New York law and jurisprudence. The Bank cannot also rely on the Appeals concluded that even if the Walden affidavit is used for purposes of summary judgment,
exceptions under the case of CIR v. Fisher and Willamette Iron and Steel Works the Bank must still comply with the procedure prescribed by the Rules to prove the foreign law.
Hence, the instant petition.
v. Muzzal, for in those cases, the attorneys of the parties testified in open court
to prove the foreign laws, while in this case, the Bank merely presented an ISSUES:
affidavit and also, the lawyer who made the affidavit did not testify in court.
1. W/N the Walden Affidavit proves New York Laws. No, because a party
DOCTRINE: Foreign laws are not a matter of judicial notice. Like any other needs to comply with Section 24 of Rule 132 in order to prove foreign laws.
fact, they must be alleged and proven. And in order to prove foreign laws in the The Walden Affidavit did not comply with this section.
Philippines, a party needs to comply with Section 24 of Rule 132 of the Rules of
RATIO:
Court.
1. The Bank filed its motion for partial summary judgment pursuant to Section
FACTS:
2, Rule 34 of the old Rules of Court which reads:
1. On May 17, 1994, respondent Rafael Ma. Guerrero filed a complaint for a. "Section 2. Summary judgment for defending party. – A party against whom a claim,
damages against petitioner Manufacturers Hanover Trust Co. and/or counterclaim, or cross-claim is asserted or a declaratory relief is sought may, at any
Chemical Bank ("the Bank" for brevity) with the RTC of Manila. Guerrero time, move with supporting affidavits for a summary judgment in his favor as to all
sought payment of damages allegedly for (1) illegally withheld taxes charged or any part thereof."
against interests on his checking account with the Bank; (2) a returned check 2. In a motion for summary judgment, the crucial question is: are the issues raised in the
worth US$18,000.00 due to signature verification problems; and (3) pleadings genuine, sham or fictitious, as shown by affidavits, depositions or admissions
unauthorized conversion of his account. Guerrero amended his complaint on accompanying the motion?
3. A perusal of the parties’ respective pleadings would show that there are a. Although it is desirable that foreign law be proved in accordance with the above rule,
genuine issues of fact that necessitate formal trial. Guerrero’s complaint however, the Supreme Court held in the case of Willamette Iron and Steel Works v.
Muzzal, that (Section 25, Rule 132 of the Revised Rules of Court) does not exclude
before the RTC contains a statement of the ultimate facts on which he relies the presentation of other competent evidence to prove the existence of a foreign law.
for his claim for damages. He is seeking damages for what he asserts as
"illegally withheld taxes charged against interests on his checking account b. In that case, the Supreme Court considered the testimony under oath of an attorney-
at-law of San Francisco, California, who quoted verbatim a section of California Civil
with the Bank, a returned check worth US$18,000.00 due to signature Code and who stated that the same was in force at the time the obligations were
verification problems, and unauthorized conversion of his account." contracted, as sufficient evidence to establish the existence of said law.

4. In its Answer, the Bank set up its defense that the agreed foreign law to c. Accordingly, in line with this view, the Supreme Court in the Collector of Internal
govern their contractual relation bars the recovery of damages other than Revenue v. Fisher et al., upheld the Tax Court in considering the pertinent law of
California as proved by the respondents’ witness who was a lawyer.
actual. Evidently, facts are asserted in Guerrero’s complaint while specific
denials and affirmative defenses are set out in the Bank’s answer. 11. The Bank, however, cannot rely on Willamette Iron and Steel Works v.
Muzzal or Collector of Internal Revenue v. Fisher to support its cause.
5. Further, as correctly ruled by the Court of Appeals, the Bank’s motion for
partial summary judgment as supported by the Walden affidavit does not 12. These cases involved attorneys testifying in open court during the trial in
demonstrate that Guerrero’s claims are sham, fictitious or contrived. On the the Philippines and quoting the particular foreign laws sought to be
contrary, the Walden affidavit shows that the facts and material allegations established.
as pleaded by the parties are disputed and there are substantial triable issues
13. On the other hand, the Walden affidavit was taken abroad ex parte and the
necessitating a formal trial.
affiant never testified in open court. The Walden affidavit cannot be
6. Simplified Version: The Bank was trying to limit the trial only the issue of considered as proof of New York law on damages not only because it is self-
actual damages, by first claiming that New York laws govern the relationship serving but also because it does not state the specific New York law on
between the Bank and Guerrero and second by using the Walden Affidavit to damages.
prove that New York laws do not allow Guerrero to claim for damages except
14. The Walden affidavit states conclusions from the affiant’s personal
actual damages.
interpretation and opinion of the facts of the case vis a vis the alleged laws
7. The resolution of whether a foreign law allows only the recovery of actual and jurisprudence without citing any law in particular.
damages is a question of fact as far as the trial court is concerned since foreign
15. The citations in the Walden affidavit of various U.S. court decisions do not
laws do not prove themselves in our courts.
constitute proof of the official records or decisions of the U.S. courts. While
8. Foreign laws are not a matter of judicial notice. Like any other fact, they the Bank attached copies of some of the U.S. court decisions cited in the
must be alleged and proven. Walden affidavit, these copies do not comply with Section 24 of Rule 132
on proof of official records or decisions of foreign courts.
9. Under Section 24 of Rule 132, the record of public documents of a sovereign
authority or tribunal may be proved by (1) an official publication thereof or 16. The Bank’s intention in presenting the Walden affidavit is to prove New York
(2) a copy attested by the officer having the legal custody thereof. Such law and jurisprudence.
official publication or copy must be accompanied, if the record is not kept in
17. However, because of the failure to comply with Section 24 of Rule 132 on
the Philippines, with a certificate that the attesting officer has the legal
how to prove a foreign law and decisions of foreign courts, the Walden
custody thereof. The certificate may be issued by any of the authorized
affidavit did not prove the current state of New York law and jurisprudence.
Philippine embassy or consular officials stationed in the foreign country in
Thus, the Bank has only alleged, but has not proved, what New York law and
which the record is kept, and authenticated by the seal of his office. The
jurisprudence are on the matters at issue.
attestation must state, in substance, that the copy is a correct copy of the
original, or a specific part thereof, as the case may be, and must be under the 18. There being substantial triable issues between the parties, the courts a quo correctly denied the
official seal of the attesting officer. Bank’s motion for partial summary judgment. There is a need to determine by presentation of
evidence in a regular trial if the Bank is guilty of any wrongdoing and if it is liable for damages
10. Certain exceptions to this rule were recognized in Asiavest Limited v. Court under the applicable laws.
of Appeals which held that: 19. AFFIRMED.
 010 Crescent Problem v. M/V "Lok Maheshwari (Cruz) FACTS:
November 11, 2005 | Puno, J. | doctrine of processual presumption 1. M/V Lok Maheshwari (Vessel) is an oceangoing vessel of Indian registry that
PETITIONER: Crescent Petroleum LTD is owned by Shipping Corporation of India (SCI), a corporation organized
RESPONDENTS: M/V Look Maheshwari, The shipping Corporation Od India, and existing under the laws of India and principally owned by the
and Portserv Limited and/or Transmar Shipping, Inc., Government of India.
2. It was time-chartered by SCI to Halla Merchant Marine Co. Ltd. (Halla), a
SUMMARY: M/V Lok Maheshwari (Vessel) is owned by SCI which was time South Korean company. Halla, in turn, sub-chartered the Vessel through a
chartered to Halla, who also sub-chartered it to Transmar. Transmar further sub- time charter to Transmar Shipping, Inc. (Transmar).
chartered it to Portserv who requested Crescent to deliver marine fuel oils (bunker 3. Transmar further sub-chartered the Vessel to Portserv Limited (Portserv).
fuels) to the Vessel. Crescent, then, contracted with Marine Petrobulk for the Both Transmar and Portserv are corporations organized and existing under
physical delivery of the bunker fuels to the vessel. Marine Petrobulk delivered the laws of Canada.
the bunker fuels to the Vessel at the port of Pioneer Grain, Vancouver, Canada. . 4. Portserv requested Crescent Petroleum, Ltd. (Crescent), a corporation
Crescent issued a check for the same amount in favor of Marine Petrobulk, which organized and existing under the laws of Canada that is engaged in the
check was duly encashed. Having paid Marine Petrobulk, Crescent issued a business of selling petroleum and oil products for the use and operation of
revised invoice to Portserv Limited, and/or the Master, and/or Owners, and/or oceangoing vessels, to deliver marine fuel oils (bunker fuels) to the Vessel.
Operators, and/or Charterers of M/V Lok Maheshwari. The period lapsed and 5. Crescent granted and confirmed the request through an advice via facsimile.
several demands were made but no payment was received. Also, the checks issued As security for the payment of the bunker fuels and related services Crescent
to Crescent as security for the payment of the bunker fuels were dishonored for received two (2) checks in the amounts of US$100,000.00 and
insufficiency of funds. While the Vessel was docked at the port of Cebu City, US$200,000.00. Thus, Crescent contracted with its supplier, Marine
Crescent instituted before the RTC of Cebu City an action for a sum of money. Petrobulk Limited (Marine Petrobulk), another Canadian corporation, for the
WoN the Philippine law applies in the case. The SC ruled in the negative. In light physical delivery of the bunker fuels to the Vessel.
of the interests of the various foreign elements involved, it is clear that Canada 6. Marine Petrobulk delivered the bunker fuels amounting to US$103,544
has the most significant interest in this dispute. The injured party is a Canadian inclusive of barging and demurrage charges to the Vessel at the port of
corporation, the sub-charterer which placed the orders for the supplies is also Pioneer Grain, Vancouver, Canada.
Canadian, the entity which physically delivered the bunker fuels is in Canada, the a. The Chief Engineer Officer of the Vessel duly acknowledged and
place of contracting and negotiation is in Canada, and the supplies were delivered received the delivery receipt. Marine Petrobulk issued an invoice to
in Canada. It is worthy to note that Crescent never alleged and proved Canadian Crescent for the US$101,400.00 worth of the bunker fuels. Crescent
law as basis for the existence of a maritime lien. It is well-settled that a party issued a check for the same amount in favor of Marine Petrobulk,
whose cause of action or defense depends upon a foreign law has the burden of which check was duly encashed.
proving the foreign law. Such foreign law is treated as a question of fact to be 7. Having paid Marine Petrobulk, Crescent issued a revised invoice to Portserv
properly pleaded and proved. Crescents insistence on enforcing a maritime lien Limited, and/or the Master, and/or Owners, and/or Operators, and/or
before the Philippine courts depended on the existence of a maritime lien under Charterers of M/V Lok Maheshwari in the amount of US$103,544.00 with
the proper law. By erroneously claiming a maritime lien under Philippine law instruction to remit the amount on or before December 1, 1995. The period
instead of proving that a maritime lien exists under Canadian law, Crescent failed lapsed and several demands were made but no payment was received.
to establish a cause of action. Even if we apply the doctrine of processual 8. Also, the checks issued to Crescent as security for the payment of the bunker
presumption, the result will still be the same. The Ship Mortgage Decree of 1978, fuels were dishonored for insufficiency of funds. As a consequence, Crescent
listed the requisites for maritime liens on necessaries to exist but are not present incurred additional expenses of US$8,572.61 for interest, tracking fees, and
in the instant case. legal fees.
DOCTRINE: It is well-settled that a party whose cause of action or defense 9. While the Vessel was docked at the port of Cebu City, Crescent instituted
depends upon a foreign law has the burden of proving the foreign law. Such before the RTC of Cebu City an action for a sum of money with prayer for
foreign law is treated as a question of fact to be properly pleaded and proved. temporary restraining order and writ of preliminary attachment against
India South Korea Canada Canada Vessel and SCI, Portserv and/or Transmar.
SCI (owner) –> Halla (time-chartered the vessel) –> Transmar (sub-chartered) -> Poertserv -> Crescent
(deliver bunker fuels to the Vessel) -> Marine Petrobulk (physical delivery
 10. The trial court issued a writ of attachment against the Vessel with bond September 3, 2002 are AFFIRMED. The instant petition for review on certiorari is
at P2,710,000.00. Crescent withdrew its prayer for a temporary restraining DENIED for lack of merit. Cost against petitioner.
order and posted the required bond. SO ORDERED.
11. summonses were served to Vessel and SCI, and Portserv and/or Transmar
through the Master of the Vessel. Vessel and SCI, through Pioneer Insurance RATIO:
and Surety Corporation (Pioneer), filed an urgent ex-parte motion to approve 1. UNder Batas Pambansa Bilang 129, as amended by Republic Act No. 7691,
Pioneers letter of undertaking, to consider it as counter-bond and to discharge RTCs exercise exclusive original jurisdiction (i)n all actions in admiralty and
the attachment. the trial court granted the motion; thus, the letter of maritime where the demand or claim exceeds two hundred thousand pesos
undertaking was approved as counter-bond to discharge the attachment. (P200,000) or in Metro Manila, where such demand or claim exceeds four
12. For failing to file their respective answers and upon motion of Crescent, the hundred thousand pesos (P400,000).
trial court declared Vessel and SCI, Portserv and/or Transmar in default. 2. Two (2) tests have been used to determine whether a case involving a contract
Crescent was allowed to present its evidence ex-parte. comes within the admiralty and maritime jurisdiction of a court –
13. thw trial court rendered its decision in favor of Crescent a. the locational test and
14. Vessel and SCI appealed to the Court of Appeals. b. the subject matter test.
a. They attached copies of the charter parties between SCI and Halla, 3. The English rule follows the locational test wherein maritime and admiralty
between Halla and Transmar, and between Transmar and Portserv. jurisdiction, with a few exceptions, is exercised only on contracts made upon
They pointed out that Portserv was a time charterer and that there is the sea and to be executed thereon.
a clause in the time charters between SCI and Halla, and between 4. This is totally rejected under the American rule where the criterion in
Halla and Transmar, which states that the Charterers shall provide determining whether a contract is maritime depends on the nature and subject
and pay for all the fuel except as otherwise agreed. matter of the contract, having reference to maritime service and transactions.
b. They submitted a copy of Part II of the Bunker Fuel Agreement 5. A contract for furnishing supplies like the one involved in this case is
between Crescent and Portserv containing a stipulation that New maritime and within the jurisdiction of admiralty. It may be invoked before
York law governs the construction, validity and performance of the our courts through an action in rem or quasi in rem or an action in personam.
contract. 6. Articles 579 and 584 [of the Code of Commerce] provide a method of
c. They likewise submitted certified copies of the Commercial collecting or enforcing not only the liens created under Section 580 but also
Instruments and Maritime Lien Act of the United States (U.S.), for the collection of any kind of lien whatsoever.
some U.S. cases, and some Canadian cases to support their defense. a. The substantive law is found in Article 580 of the Code of
15. Court of Appeals reversed that of the trial court Commerce.
a. The appellate court denied Crescents motion for reconsideration b. The procedural law is to be found in Article 584 of the same Code.
explaining that it dismissed the instant action primarily on the 7. The result is, therefore, that in the Philippines any vessel even though it be a
ground of forum non conveniens considering that the parties are foreign vessel found in any port of this Archipelago may be attached and sold
foreign corporations which are not doing business in the under the substantive law which defines the right, and the procedural law
Philippines. contained in the Code of Commerce by which this right is to be enforced.
16. Hence, this petition submitting the following issues for resolution, 8. But where neither the law nor the contract between the parties creates any
lien or charge upon the vessel, the only way in which it can be seized before
ISSUE/s: judgment is by pursuing the remedy relating to attachment under Rule 59
1. WoN the Philippine law applies to the case – no, In light of the interests of [now Rule 57] of the Rules of Court.
the various foreign elements involved, it is clear that Canada has the most
significant interest in this dispute. However, Crescent never alleged and
proved Canadian law as basis for the existence of a maritime lien.

RULING: IN VIEW WHEREOF, the Decision of the Court of Appeals in CA-G.R.

No. CV 54920, dated November 28, 2001, and its subsequent Resolution of
 9. Crescent bases its claim of a maritime lien on Sections b.
The Lauritzen-Romero-Rhoditis trilogy of cases, which replaced
21,42 2243 and 2344 of Presidential Decree No. 1521 (P.D. No. 1521), also such single-factor methodologies as the law of the place of supply.
known as the Ship Mortgage Decree of 1978 i. In Lauritzen v. Larsen, adopted a multiple-contact
10. Crescent submits that these provisions apply to both domestic and foreign test to determine, in the absence of a specific
vessels, as well as domestic and foreign suppliers of necessaries. Congressional directive as to the statutes reach, which
a. It contends that the use of the term any person in Section 21 implies jurisdictions law should be applied. The following factors
that the law is not restricted to domestic suppliers but also includes were considered:
all persons who supply provisions and necessaries to a vessel, 1. place of the wrongful act;
whether foreign or domestic. 2. law of the flag;
b. It points out further that the law does not indicate that the supplies 3. allegiance or domicile of the injured;
or necessaries must be furnished in the Philippines in order to give 4. allegiance of the defendant shipowner;
petitioner the right to seek enforcement of the lien with a Philippine 5. place of contract;
court. 6. inaccessibility of foreign forum; and
11. Vessel and SCI, on the other hand, maintain that Section 21 of the P.D. No. 7. law of the forum.
1521 or the Ship Mortgage Decree of 1978 does not apply to a foreign c. The factors provided in Restatement (Second) of Conflicts of
supplier as the provision refers only to a situation where the person furnishing Law have also been applied, especially in resolving cases brought
the supplies is situated inside the territory of the Philippines and not where under the Federal Maritime Lien Act.
the necessaries were furnished in a foreign jurisdiction like Canada. i. Their application suggests that in the absence of an
12. P.D. No. 1521 or the Ship Mortgage Decree of 1978 is patterned closely from effective choice of law by the parties, the forum contacts to
the U.S. Ship Mortgage Act of 1920 and the Liberian Maritime Law relating be considered include:
to preferred mortgages. 1. the place of contracting;
13. Notably, Sections 21, 22 and 23 of P.D. No. 1521 or the Ship Mortgage 2. the place of negotiation of the contract;
Decree of 1978 are identical to Subsections P, Q, and R, respectively, of the 3. the place of performance;
U.S. Ship Mortgage Act of 1920, which is part of the Federal Maritime Lien 4. the location of the subject matter of the contract;
Act. Hence, U.S. jurisprudence finds relevance to determining whether P.D. and
No. 1521 or the Ship Mortgage Decree of 1978 applies in the present case. 5. the domicile, residence, nationality, place of
14. The various tests used in the U.S. to determine whether a maritime lien exists incorporation and place of business of the parties.
are the following: 15. Court cannot sustain petitioner Crescents insistence on the application of P.D.
a. In a suit to establish and enforce a maritime lien for supplies No. 1521 or the Ship Mortgage Decree of 1978 and hold that a maritime lien
furnished to a vessel in a foreign port, whether such lien exists, or exists.
whether the court has or will exercise jurisdiction, depends on a. Out of the seven basic factors listed in the case of Lauritzen,
the law of the country where the supplies were furnished, which Philippine law only falls under one the law of the forum. All other
must be pleaded and proved. This principle was laid down in the elements are foreign Canada is the place of the wrongful act, of the
1888 case of The Scotia, reiterated in The Kaiser Wilhelm allegiance or domicile of the injured and the place of contract; India
II (1916), in The Woudrichem (1921) and in The City of is the law of the flag and the allegiance of the defendant shipowner.
Atlanta (1924). Balancing these basic interests, it is inconceivable that the

42
Sec. 21. Maritime Lien for Necessaries; persons entitled to such lien. - Any person furnishing repairs, supplies, vessel at the port of supply is entrusted. No person tortuously or unlawfully in possession or charge of a vessel shall have
towage, use of dry dock or maritime railway, or other necessaries, to any vessel, whether foreign or domestic, authority to bind the vessel.
44
upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien Sec. 23. Notice to Person Furnishing Repairs, Supplies and Necessaries. - The officers and agents of a vessel specified
on the vessel, which may be enforced by suit in rem, and it shall be necessary to allege or prove that credit in Section 22 of this Decree shall be taken to include such officers and agents when appointed by a charterer, by an
was given to the vessel. owner pro hac vice, or by an agreed purchaser in possession of the vessel; but nothing in this Decree shall be construed to
43
Sec. 22. Persons Authorized to Procure Repairs, Supplies and Necessaries. - The following persons shall be presumed confer a lien when the furnisher knew, or by exercise of reasonable diligence could have ascertained, that because of the
to have authority from the owner to procure repairs, supplies, towage, use of dry dock or marine railway, and other terms of a charter party, agreement for sale of the vessel, or for any other reason, the person ordering the repairs, supplies,
necessaries for the vessel: The managing owner, ships husband, master or any person to whom the management of the or other necessaries was without authority to bind the vessel therefor.
 Philippine court has any interest in the case that outweighs the 21. Crescents insistence on enforcing a maritime lien before our courts depended
interests of Canada or India for that matter. on the existence of a maritime lien under the proper law. By erroneously
b. the Ship Mortgage Decree of 1978 is inapplicable following the claiming a maritime lien under Philippine law instead of proving that a
factors under Restatement (Second) of Conflict of Laws. Like the maritime lien exists under Canadian law, Crescent failed to establish a cause
Federal Maritime Lien Act of the U.S., the Ship Mortgage Decree of action.
of 1978 was enacted primarily to protect Filipino suppliers and was 22. Even if we apply the doctrine of processual presumption, the result will still
not intended to create a lien from a contract for supplies between be the same. Under P.D. No. 1521 or the Ship Mortgage Decree of 1978, the
foreign entities delivered in a foreign port. following are the requisites for maritime liens on necessaries to exist:
c. Applying the Ship Mortgage Decree of 1978 and rule that a a. the necessaries must have been furnished to and for the benefit of
maritime lien exists would not promote the public policy behind the the vessel;
enactment of the law to develop the domestic shipping industry. b. the necessaries must have been necessary for the continuation of the
Opening up our courts to foreign suppliers by granting them a voyage of the vessel;
maritime lien under our laws even if they are not entitled to a c. the credit must have been extended to the vessel;
maritime lien under their laws will encourage forum shopping. d. there must be necessity for the extension of the credit; and
d. The submission of petitioner is not in keeping with the reasonable e. the necessaries must be ordered by persons authorized to contract on
expectation of the parties to the contract. Indeed, when the parties behalf of the vessel.
entered into a contract for supplies in Canada, they could not have 23. These do not avail in the instant case.
intended the laws of a remote country like the Philippines to a. It was not established that benefit was extended to the vessel. While
determine the creation of a lien by the mere accident of the Vessels this is presumed when the master of the ship is the one who placed
being in Philippine territory. the order, it is not disputed that in this case it was the sub-charterer
16. In light of the interests of the various foreign elements involved, it is clear Portserv which placed the orders to Crescent. Hence, the
that Canada has the most significant interest in this dispute. The injured presumption does not arise and it is incumbent upon Crescent to
party is a Canadian corporation, the sub-charterer which placed the prove that benefit was extended to the vessel which it did not.
orders for the supplies is also Canadian, the entity which physically b. Crescent did not show any proof that the marine products were
delivered the bunker fuels is in Canada, the place of contracting and necessary for the continuation of the vessel.
negotiation is in Canada, and the supplies were delivered in Canada. c. It was not established that credit was extended to the vessel. It is
17. The arbitration clause contained in the Bunker Fuel Agreement which states presumed that in the absence of fraud or collusion, where advances
that New York law governs the construction, validity and performance of the are made to a captain in a foreign port, upon his request, to pay for
contract is only a factor that may be considered in the choice-of-law analysis necessary repairs or supplies to enable his vessel to prosecute her
but is not conclusive. the lien that is the subject matter of this case arose by voyage, or to pay harbor dues, or for pilotage, towage and like
operation of law and not by contract because the shipowner was not a party services rendered to the vessel, that they are made upon the credit
to the contract under which the goods were supplied. of the vessel as well as upon that of her owners. In this case, it was
18. It is worthy to note that Crescent never alleged and proved Canadian the sub-charterer Portserv which requested for the delivery of the
law as basis for the existence of a maritime lien. To the end, it insisted on bunker fuels. The issuance of two checks amounting to US$300,000
its theory that Philippine law applies. Crescent contends that even if foreign in favor of petitioner Crescent prior to the delivery of the bunkers
law applies, since the same was not properly pleaded and proved, such as security for the payment of the obligation weakens petitioner
foreign law must be presumed to be the same as Philippine law pursuant to Crescents contention that credit was extended to the Vessel.
the doctrine of processual presumption. i. We also note that when copies of the charter parties were
19. Thus, we are left with two choices: (1) dismiss the case for petitioners failure submitted by respondents in the CA, the time charters
to establish a cause of action or (2) presume that Canadian law is the same as between SCI and Halla and between Halla and Transmar
Philippine law. In either case, the case has to be dismissed. were shown to contain a clause which states that the
20. It is well-settled that a party whose cause of action or defense depends upon Charterers shall provide and pay for all the fuel except as
a foreign law has the burden of proving the foreign law. Such foreign law is otherwise agreed. This militates against Crescents position
treated as a question of fact to be properly pleaded and proved.
 that Portserv is authorized by the shipowner to contract for
supplies upon the credit of the vessel.
d. There was no proof of necessity of credit. A necessity of credit will
be presumed where it appears that the repairs and supplies were
necessary for the ship and that they were ordered by the master. This
presumption does not arise in this case since the fuels were not
ordered by the master and there was no proof of necessity for the
supplies.
e. The necessaries were not ordered by persons authorized to contract
in behalf of the vessel as provided under Section 22 of P.D. No.
1521 or the Ship Mortgage Decree of 1978 - the managing owner,
the ships husband, master or any person with whom the
management of the vessel at the port of supply is entrusted. Clearly,
Portserv, a sub-charterer under a time charter, is not someone to
whom the management of the vessel has been entrusted.
i. A time charter is a contract for the use of a vessel for a
specified period of time or for the duration of one or more
specified voyages wherein the owner of the time-chartered
vessel retains possession and control through the master
and crew who remain his employees. Not enjoying the
presumption of authority, Crescent should have proved
that Portserv was authorized by the shipowner to contract
for supplies.
24. A discussion on the principle of forum non conveniens is unnecessary.
 011 EDI-Staffbuilders v NLRC (DAGUMAN) Labor Laws should govern all matters relating to the termination of the
December 2,1991 | Regalado, J. | Processual Presumption employment of Gran.
PETITIONER: EDI-Staffbuilders International Inc.
RESPONDENTS: NLRC and Eleazar Gran In international law, the party who wants to have a foreign law applied to a
SUMMARY: EDI is a corporation engaged in recruitment and placement of dispute or case has the burden of proving the foreign law. The foreign law is
OFWs. ESI is another recruitment agency which collaborated with EDI to treated as a question of fact to be properly pleaded and proved as the judge or
process the documentation and deployment of Gran to Saudi Arabia. Gran was labor arbiter cannot take judicial notice of a foreign law. He is presumed to
an OFW recruited by EDI, and deployed by ESI to work for OAB, in Riyadh, know only domestic or forum law.
Kingdom of Saudi Arabia. It appears that OAB asked EDI through its October
3, 1993 letter for curricula vitae of qualified applicants for the position of Unfortunately for petitioner, it did not prove the pertinent Saudi laws on the
“Computer Specialist.” In a facsimile transmission, OAB informed EDI that, matter; thus, the International Law doctrine of presumed-identity
from the applicants’ curricula vitae submitted to it for evaluation, it selected approach or processual presumption comes into play. Where a foreign law is
Gran for the position of “Computer Specialist.” After accepting OAB’s offer of not pleaded or, even if pleaded, is not proved, the presumption is that foreign
employment, Gran signed an employment contract that granted him a monthly law is the same as ours. Thus, we apply Philippine labor laws in determining
salary of USD 850.00 for a period of two years. Gran was then deployed to the issues presented before us.
Riyadh, Kingdom of Saudi Arabia on February 7, 1994. Upon arrival in Riyadh,
Gran questioned the discrepancy in his monthly salary—his employment
contract stated USD 850.00; while his POEA Information Sheet indicated USD DOCTRINE:
600.00 only. However, through the assistance of the EDI office in Riyadh, OAB In international law, the party who wants to have a foreign law applied to a
agreed to pay Gran USD 850.00 a month. dispute or case has the burden of proving the foreign law. The foreign law is
After Gran had been working for about five months for OAB, his employment treated as a question of fact to be properly pleaded and proved as the judge or
was terminated through OAB’s July 9, 1994 letter, on the following grounds labor arbiter cannot take judicial notice of a foreign law. He is presumed to
(refer to fact: NO. 6) know only domestic or forum law.
On July 11, 1994, Gran received from OAB the total amount of SR 2,948.00
representing his final pay, and on the same day, he executed a Declaration
releasing OAB from any financial obligation or otherwise, towards him. After
his arrival in the Philippines, Gran instituted a complaint, on July 21, 1994, FACTS:
against ESI/EDI, OAB, Country Bankers Insurance Corporation, and Western 1. Petitioner EDI is a corporation engaged in recruitment and placement
Guaranty Corporation with the NLRC, National Capital Region, Quezon City of OFWs. ESI is another recruitment agency which collaborated with
for underpayment of wages/salaries and illegal dismissal. ISSUE:WoN Gran’s
EDI to process the documentation and deployment of private
dismissal is justifiable by reason of incompetence, insubordination and
disobedience? NO. In cases involving OFWs, the rights and obligations among respondent to Saudi Arabia.
and between the OFW, the local recruiter/agent, and the foreign 2. Private respondent Gran was an OFW recruited by EDI, and deployed
employer/principal are governed by the employment contract. A contract freely by ESI to work for OAB (Omar Ahmed Ali Bin Bechr Est.), in Riyadh,
entered into is considered law between the parties; and hence, should be Kingdom of Saudi Arabia.
respected. In formulating the contract, the parties may establish such 3. It appears that OAB asked EDI through its October 3, 1993 letter
stipulations, clauses, terms and conditions as they may deem convenient, for curricula vitae of qualified applicants for the position of
provided they are not contrary to law, morals, good customs, public order, or “Computer Specialist.” In a facsimile transmission dated November
public policy. 29, 1993, OAB informed EDI that, from the applicants’ curricula
vitae submitted to it for evaluation, it selected Gran for the position of
In the present case, the employment contract signed by Gran specifically states
“Computer Specialist.” The faxed letter also stated that if Gran agrees
that Saudi Labor Laws will govern matters not provided for in the contract (e.g.
specific causes for termination, termination procedures, etc.). Being the law to the terms and conditions of employment contained in it, one of
intended by the parties (lex loci intentiones) to apply to the contract, Saudi which was a monthly salary of SR (Saudi Riyal) 2,250.00 (USD
 600.00), EDI may arrange for Gran’s immediate dispatch.
4. After accepting OAB’s offer of employment, Gran signed an
employment contract that granted him a monthly salary of USD RULING: WHEREFORE, petition is denied.
850.00 for a period of two years. Gran was then deployed to Riyadh,
Kingdom of Saudi Arabia on February 7, 1994. RATIO:
5. Upon arrival in Riyadh, Gran questioned the discrepancy in his 1. In cases involving OFWs, the rights and obligations among and
monthly salary—his employment contract stated USD 850.00; while between the OFW, the local recruiter/agent, and the foreign
his POEA Information Sheet indicated USD 600.00 only. However, employer/principal are governed by the employment contract. A
through the assistance of the EDI office in Riyadh, OAB agreed to pay contract freely entered into is considered law between the parties; and
Gran USD 850.00 a month. hence, should be respected. In formulating the contract, the parties
6. After Gran had been working for about five months for OAB, his may establish such stipulations, clauses, terms and conditions as they
employment was terminated through OAB’s July 9, 1994 letter, on may deem convenient, provided they are not contrary to law, morals,
the following grounds: good customs, public order, or public policy.
2. In the present case, the employment contract signed by Gran
1. Non-compliance to contract requirements by the recruitment agency specifically states that Saudi Labor Laws will govern matters not
primarily on your salary and contract duration. provided for in the contract (e.g. specific causes for termination,
2. Non-compliance to pre-qualification requirements by the recruitment termination procedures, etc.). Being the law intended by the parties
agency[,] vide OAB letter ref. F-5751-93, dated October 3, 1993. (lex loci intentiones) to apply to the contract, Saudi Labor Laws should
3. Insubordination or disobedience to Top Management Order and/or govern all matters relating to the termination of the employment of
instructions (non-submittal of daily activity reports despite several Gran.
instructions). 3. In international law, the party who wants to have a foreign law applied
to a dispute or case has the burden of proving the foreign law. The
7. On July 11, 1994, Gran received from OAB the total amount of SR foreign law is treated as a question of fact to be properly pleaded and
2,948.00 representing his final pay, and on the same day, he executed proved as the judge or labor arbiter cannot take judicial notice of a
a Declaration releasing OAB from any financial obligation or foreign law. He is presumed to know only domestic or forum law.
otherwise, towards him. 4. Unfortunately for EDI, it did not prove the pertinent Saudi laws on the
8. After his arrival in the Philippines, Gran instituted a complaint, on July matter; thus, the International Law doctrine of presumed-identity
21, 1994, against ESI/EDI, OAB, Country Bankers Insurance approach or processual presumption comes into play. Where a
Corporation, and Western Guaranty Corporation with the NLRC, foreign law is not pleaded or, even if pleaded, is not proved, the
National Capital Region, Quezon City, which was docketed as POEA presumption is that foreign law is the same as ours. Thus, we apply
ADJ (L) 94-06-2194 for underpayment of wages/salaries and illegal Philippine labor laws in determining the issues presented before us.
dismissal. 5. In illegal dismissal cases, it has been established by Philippine law and
jurisprudence that the employer should prove that the dismissal of
employees or personnel is legal and just.
ISSUES: 6. Section 33 of Article 277 of the Labor Code states that:
1. WoN Gran’s dismissal is justifiable by reason of incompetence,
insubordination, and disobedience ART. 277. MISCELLANEOUS PROVISIONS
2. WoN Gran was afforded due process prior to termination. (b) Subject to the constitutional right of workers to security of tenure and
3. WoN Gran is entitled to backwages for the unexpired portion of his their right to be protected against dismissal except for a just and authorized
contract. cause and without prejudice to the requirement of notice under Article 283 of
this Code, the employer shall furnish the worker whose employment is the “Daily Activity Reports” were required for submission by the
sought to be terminated a written notice containing a statement of the causes employees, more particularly by a Computer Specialist.
for termination and shall afford the latter ample opportunity to be heard and 10. Even though EDI and/or ESI were merely the local employment or
to defend himself with the assistance of his representative if he so desires in recruitment agencies and not the foreign employer, they should have
accordance with company rules and regulations promulgated pursuant to adduced additional evidence to convincingly show that Gran’s
guidelines set by the Department of Labor and Employment. Any decision employment was validly and legally terminated. The burden devolves
taken by the employer shall be without prejudice to the right of the workers not only upon the foreign-based employer but also on the employment
to contest the validity or legality of his dismissal by filing a complaint with or recruitment agency for the latter is not only an agent of the former,
the regional branch of the National Labor Relations Commission. The but is also solidarily liable with the foreign principal for any claims or
burden of proving that the termination was for a valid or authorized liabilities arising from the dismissal of the worker. Thus, EDI failed
cause shall rest on the employer. to prove that Gran was justifiably dismissed due to incompetence,
insubordination, or willful disobedience.
7. EDI’s imputation of incompetence on private respondent due to his SECOND ISSUE
“insufficient knowledge in programming and zero knowledge of the 1. Under the twin notice requirement, the employees must be given
ACAD system” based only on the above-mentioned letters, without 2 notices before their employment could be terminated: (1) a first
any other evidence, cannot be given credence. An allegation of notice to apprise the employees of their fault, and (2) a second
incompetence should have a factual foundation. Incompetence may be notice to communicate to the employees that their employment is
shown by weighing it against a standard, benchmark, or criterion. being terminated. In between the first and second notice, the
However, EDI failed to establish any such bases to show how employees should be given a hearing or opportunity to defend
petitioner found Gran incompetent. themselves personally or by counsel of their choice.
8. In addition, the elements that must concur for the charge of 2. A careful examination of the records revealed that, indeed, OAB’s
insubordination or willful disobedience to prosper were not present. manner of dismissing Gran fell short of the two notice
In Micro Sales Operation Network v. NLRC, we held that: For willful requirement. While it furnished Gran the written notice informing
disobedience to be a valid cause for dismissal, the following twin him of his dismissal, it failed to furnish Gran the written notice
elements must concur: (1) the employee’s assailed conduct must have apprising him of the charges against him, as prescribed by the
been willful, that is, characterized by a wrongful and perverse attitude; Labor Code. Consequently, he was denied the opportunity to
and (2) the order violated must have been reasonable, lawful, made respond to said notice. In addition, OAB did not schedule a
known to the employee and must pertain to the duties which he had hearing or conference with Gran to defend himself and adduce
been engaged to discharge. evidence in support of his defenses. Moreover, the July 9, 1994
9. EDI failed to discharge the burden of proving Gran’s insubordination termination letter was effective on the same day. This shows that
or willful disobedience. As indicated by the second requirement OAB had already condemned Gran to dismissal, even before Gran
provided for in Micro Sales Operation Network, in order to justify was furnished the termination letter. It should also be pointed out
willful disobedience, we must determine whether the order violated that OAB failed to give Gran the chance to be heard and to defend
by the employee is reasonable, lawful, made known to the employee, himself with the assistance of a representative in accordance with
and pertains to the duties which he had been engaged to discharge. In Article 277 of the Labor Code. Clearly, there was no intention to
the case at bar, petitioner failed to show that the order of the company provide Gran with due process. Summing up, Gran was notified
which was violated—the submission of “Daily Activity Reports”— and his employment arbitrarily terminated on the same day,
was part of Gran’s duties as a Computer Specialist. Before the Labor through the same letter, and for unjustified grounds.
Arbiter, EDI should have provided a copy of the company policy, Obviously, Gran was not afforded due process.
Gran’s job description, or any other document that would show that 3. Pursuant to the doctrine laid down in Agabon, an employer is
 liable to pay nominal damages as indemnity for violating the
employee’s right to statutory due process. Since OAB was in
breach of the due process requirements under the Labor Code and
its regulations, OAB, ESI, and EDI, jointly and solidarily, are
liable to Gran in the amount of PhP 30,000.00 as indemnity.
THIRD ISSUE
1. We reiterate the rule that with regard to employees hired for a fixed
period of employment, in cases arising before the effectivity of R.A.
No. 8042 (Migrant Workers and Overseas Filipinos Act) on August
25, 1995, that when the contract is for a fixed term and the employees
are dismissed without just cause, they are entitled to the payment of
their salaries corresponding to the unexpired portion of their contract.
On the other hand, for cases arising after the effectivity of R.A. No.
8042, when the termination of employment is without just, valid or
authorized cause as defined by law or contract, the worker shall be
entitled to the full reimbursement of his placement fee with interest of
12% per annum, plus his salaries for the unexpired portion of his
employment contract or for 3 months for every year of the unexpired
term whichever is less.
2. In the present case, the employment contract provides that the
employment contract shall be valid for a period of 2 years from the
date the employee starts to work with the employer. Gran arrived in
Riyadh, Saudi Arabia and started to work on February 7, 1994; hence,
his employment contract is until February 7, 1996. Since he was
illegally dismissed on July 9, 1994, before the effectivity of R.A. No.
8042, he is therefore entitled to backwages corresponding to the
unexpired portion of his contract, which was equivalent to USD
16,150.
 012 Dacanay v. Florendo (DAYU) 2. Isabel having died, her surviving spouse Tirso is seeking probate of said joint
September 19, 1950 | Ozaeta, J. | Exceptions to the Application of Foreign Law and reciprocal will, which provides in substance that whoever of the spouses,
joint testators, shall survive the other, shall inherit all the properties of the
PETITIONER: Testate estate of Isabel V. Florendo, deceased.; Tirso Dacanay latter, with an agreement as to how the surviving spouse shall dispose of the
RESPONDENTS: Pedro V. Florendo et al. properties.
3. Relatives of Isabel opposed.
SUMMARY: Isabel and Tirso executed a joint and reciprocal in 1940. After the 4. Before hearing evidence, the trial court—after requiring from counsel of both
death of Isabel, Tirso seeks to probate will in CFI La Union, with the will parties written arguments on the question of w/n joint and reciprocal will may
providing in substance that whoever of the spouses, joint testators, shall survive be probated in view of Art. 669 of the CC—issued order dismissing the
the other, shall inherit all the properties of the latter. The relatives of the Isabel petition for probate on ground that the will is null and void as having been
opposed the probate of said will on the ground that it is null and void for violating executed in violation of Art. 669.45
Art. 669 of CC. CFI dismissed probate. Tirso appeals and says that Art. 669, which 5. Tirso appealed.
only pertains to execution of joint wills, has been repealed by Act. 190, which
provides for and regulates the extrinsic formalities of wills; thus, making the issue ISSUE/s: WoN joint will may be probated—NO,
on whether 2 wills should be executed conjointly or separately a mere extrinsic
formality. The Issue is w/n Art. 669 is repealed by Act. 190. The SC said No, and RULING: Order appealed from is affirmed.
that this was already decided in a prior case which held that the wisdom of the
provision of Art. 669 and the fact that it has not been repealed, at least not RATIO:
expressly, as well as the consideration that its provisions are not incompatible with 1. We agree with Tirso’s view, supported by eminent commentators, that the
those of the Code of Civil Procedure on the subject of wills, means that it’s still in prohibition of Art. 669 is directed against the execution of joint wills, or the
force. Art. 669 is not unwise and is not against public policy. The reason for this expression by 2 or more testators of their wills in a single document and by
is that when a will is made jointly or in the same instrument, the spouse who is one act, rather than against mutual or reciprocal wills, which may be
more aggressive, stronger in will or character and dominant is liable to dictate the separately executed.
terms of the will for his or her own benefit or for that of third persons whom he or 2. Upon this premise, Tirso argues that Art. 669 has been repealed by Act. 190
she desires to favor. And, where the will is not only joint but reciprocal, either one (Code of Civil Procedure), which he claims provides for and regulates the
of the spouses who may happen to be unscrupulous, wicked, faithless or desperate, extrinsic formalities of wills, contending that whether 2 wills should be
knowing as he or she does the terms of the will whereby the whole property of the executed conjointly or separately is but a matter of extrinsic formality.
spouses both conjugal and paraphernal goes to the survivor, may be tempted to 3. Question raised by Tirso has recently been decided by this court adversely to
kill or dispose of the other. him in In Re Will of Victor Bilbao—wherein Victor and Ramona executed a
will conjointly and directed that the surviving spouse gets all the real and
DOCTRINE: personal properties and the conjugal properties. That will was denied probate
Considering the wisdom of the provisions of this article 669 and the fact that it has by CFI of Negros Oriental on ground that it was prohibited by Art. 669. The
not been repealed, at least not expressly, as well as the consideration that its surviving spouse there also contended that Art. 669 has been repealed by
provisions are not incompatible with those of the Code of Civil Procedure on the sections 614 and 618 of the Code of Civil Procedure, Act. 190.
subject of wills, we believe and rule that said article 669 of the Civil Code is still 4. In deciding that question, this court—speaking thru Mr. Montemayor—said:
in force. 5. “We cannot agree to the contention of the appellant that the provisions of the
Code of Civil Procedure on wills have completely superseded Chapter I, Title
III of the Civil Code on the same subject matter, resulting in the complete
FACTS:
repeal of said Civil Code provisions. In the study we have made of this
1. This is a special proceeding commenced in CFI La Union to probate a joint
subject, we have found a number of cases decided by this court wherein
and reciprocal will executed by spouses Isabel V. Florendo and Tirso
several articles of the Civil Code regarding wills have not only been referred
Dacanay on Oct. 20, 1940.

45
ART. 669. Two or more persons cannot make a will conjointly or in the same instrument, either for their
reciprocal benefit or for the benefit of a third person."
 to but have also been applied side by side with the provisions of the Code of
Civil Procedure.
6. The provision of article 669 prohibiting the execution of a will by two or
more persons conjointly or in the same instrument either for their reciprocal
benefit or for the benefit of a third person, is not unwise and is not against
public policy. The reason for this provision, especially as regards husband
and wife, is that when a will is made jointly or in the same instrument, the
spouse who is more aggressive, stronger in will or character and dominant is
liable to dictate the terms of the will for his or her own benefit or for that of
third persons whom he or she desires to favor. And, where the will is not only
joint but reciprocal, either one of the spouses who may happen to be
unscrupulous, wicked, faithless or desperate, knowing as he or she does the
terms of the will whereby the whole property of the spouses both conjugal
and paraphernal goes to the survivor, may be tempted to kill or dispose of the
other.
7. Considering the wisdom of the provisions of this article 669 and the fact that
it has not been repealed, at least not expressly, as well as the consideration
that its provisions are not incompatible with those of the Code of Civil
Procedure on the subject of wills, we believe and rule that said article 669 of
the Civil Code is still in force. And we are not alone in this opinion.
8. Mr. Justice Willard as shown by his Notes on the Civil Code believes that
this article 669 is still in force.
9. We find that this article 669 has been reproduced word for word in article 818
of the New Civil Code (Republic Act No. 386). The implication is that the
Philippine Legislature that passed this Act and approved the New Civil Code,
including the members of the Code Commission who prepared it, are of the
opinion that the provisions of article 669 of the old Civil Code are not
incompatible with those of the Code of Civil Procedure."
 YAO KEE, et al. vs. SY-GONZALES (Eleazar) he was then residing, leaving behind real and personal properties here in the
November 24, 1988 | Cortes, J. | Exceptions to application of foreign law Philippines worth P300,000.00 more or less.
2. Thereafter, Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo
PETITIONERS: YAO KEE, SZE SOOK WAH, SZE LAI CHO, and SY CHUN Sy filed a petition for the grant of letters of administration in then Court of
YEN First Instance of Rizal Branch XXXIII, Caloocan City.
RESPONDENTS: AIDA SY-GONZALES, MANUEL SY, TERESITA SY- 3. In said petition they alleged among others that:
BERNABE, RODOLFO SY, and HONORABLE COURT OF APPEALS a. (a) they are the children of the deceased with Asuncion Gillego;
b. (b) to their knowledge Sy Mat died intestate;
SUMMARY: Sy Kiat, a Chinese national died in Caloocan City, leaving behind c. (c) they do not recognize Sy Kiat's marriage to Yao Kee nor the
his real and personal properties in the Philippines worth P 300,000 more or less. filiation of her children to him; and,
Aida Sy-Gonzales, et. al. filed a petition for the grant of letters of administration d. (d) they nominate Aida Sy-Gonzales for appointment as
claiming among other things that they are children of the deceased with Asuncion administratrix of the intestate estate of the deceased.
Gillego, a Filipina. The petition was opposed by Yao kee who alleged that she is 4. This petition was opposed by Yao Kee, Sze Sook Wah, Sze Lai Cho and Sy
the lawful wife of the deceased whom he married in China and that one of her Yun Chen who alleged that:
children, Sze Sook Wah, should be the administrator of the deceased. The CFI a. (a) Yao Kee is the lawful wife of Sy Kiat whom he married on
decided in favor of Yao Kee’s petition but was modified and set aside by the Court January 19, 1931 in China;
of Appeals by declaring all parties as natural children of Sy Kiat thus having equal b. (b) the other oppositors are the legitimate children of the deceased
rights. The issue before the SC is WoN the Ca erred in declaring that the marriage with Yao Kee; and,
between Sy Kiat and Yao Kee have not been proven in accordance with Chinese c. (c) Sze Sook Wah is the eldest among them and is competent,
laws and customs – NO, CA did not err, Yao Kee et al. did not present any willing and desirous to become the administratrix of the estate of Sy
competent evidence relative to the law and custom of China on marriage. The Kiat
testimonies of Yao and Gan Ching cannot be considered as proof of China's law 5. After hearing, the probate court, finding among others that:
or custom on marriage not only because they arecself-serving evidence, but more a. (1) Sy Kiat was legally married to Yao Kee
importantly, there is no showing that they are competent to testify on the subject b. (2) Sze Sook Wah, Sze Lai Cho and Sze Chun Yen are the legitimate
matter. The law requires that "a custom must be proved as a fact, according to the children of Yao Kee with Sy Mat; and
rules of evidence" On this score the Court had occasion to state that "a local c. (3) Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo
custom as a source of right can not be considered by a court of justice unless such Sy are the acknowledged illegitimate offsprings of Sy Kiat with
custom is properly established by competent evidence like any other fact" The Asuncion Gillego
same evidence, if not one of a higher degree, should be required of a foreign 6. Held if favor of the oppositors, Yao Kee et al. and appointed Sze Sook Wah
custom. Accordingly, in the absence of proof of the Chinese law on marriage, it as the administratrix of the intestate estate of the deceased
should be presumed that it is the same as ours. Since Yao Kee admitted in her 7. On appeal the Court of Appeals rendered a decision modifying that of the
testimony that there was no solemnizing officer as is known here in the when her probate court, the dispositive portion of which reads:
alleged marriage to Sy Mat was celebrated, it therefore follows that her marriage 8. IN VIEW OF THE FOREGOING, the decision of the lower Court is hereby
to Sy Kiat, even if true, cannot be recognized in this jurisdiction. MODIFIED and SET ASIDE and a new judgment rendered as follows:
a. (1) Declaring petitioners Aida Sy-Gonzales, Manuel Sy, Teresita
DOCTRINE: Court has held that to establish a valid foreign marriage two things Sy- Bernabe and Rodolfo Sy acknowledged natural children of the
must be proven, namely: (1) the existence of the foreign law as a question of fact; deceased Sy Kiat with Asuncion Gillego, an unmarried woman with
and (2) the alleged foreign marriage by convincing evidence whom he lived as husband and wife without benefit of marriage for
many years:
The law requires that "a custom must be proved as a fact, according to the rules of b. (2) Declaring oppositors Sze Sook Wah, Sze Lai Chu and Sze Chun
evidence" Yen, the acknowledged natural children of the deceased Sy Kiat
with his Chinese wife Yao Kee, also known as Yui Yip, since the
FACTS: legality of the alleged marriage of Sy Mat to Yao Kee in China had
1. Sy Kiat, a Chinese national, died on January 17, 1977 in Caloocan City where not been proven to be valid to the laws of the Chinese People's
 Republic of China; RATIO:
c. (3) Declaring the deed of sale executed by Sy Kiat on December 7, 1. Petitioners, Yao Kee et al. argue that the marriage of Sy Kiat to Yao Kee in
1976 in favor of Tomas Sy of the Avenue Tractor and Diesel Parts accordance with Chinese law and custom was conclusively proven. To
Supply to be valid and accordingly, said property should be buttress this argument they rely on the following testimonial and
excluded from the estate of the deceased Sy Kiat; and documentary evidence.
d. (4) Affirming the appointment by the lower court of Sze Sook Wah 2. First, the testimony of Yao Kee summarized by the trial court as follows:
as judicial administratrix of the estate of the deceased. a. Yao Kee testified that she was married to Sy Kiat on January 19,
9. From said decision both parties moved for partial reconsideration, which was 1931 in Fookien, China; that she does not have a marriage certificate
however denied by respondent court. They thus interposed their respective because the practice during that time was for elders to agree upon
appeals to this Court. the betrothal of their children, and in her case, her elder brother was
10. Private respondents, Sy-Gonzales et al., filed a petition with this Court the one who contracted or entered into [an] agreement with the
docketed as G.R. No. 56045 entitled "Aida Sy-Gonzales, Manuel Sy, Teresita parents of her husband; that the agreement was that she and Sy Mat
Sy-Bernabe and Rodolfo Sy v. Court of Appeals, Yao Kee, Sze Sook Wah, would be married, the wedding date was set, and invitations were
Sze Lai Cho and Sy Chun Yen" questioning paragraphs (3) and (4) of the sent out; that the said agreement was complied with; that she has
dispositive portion of the Court of Appeals' decision. The Supreme Court five children with Sy Kiat, but two of them died; that those who are
however resolved to deny the petition and the motion for reconsideration. alive are Sze Sook Wah, Sze Lai Cho, and Sze Chun Yen, the eldest
Thus on March 8, 1982 entry of judgment was made in G.R. No. 56045. being Sze Sook Wah who is already 38 years old; that Sze Sook Wah
11. The instant petition, on the other hand, questions paragraphs (1) and (2) of was born on November 7, 1939; that she and her husband, Sy Mat,
the dispositive portion of the decision of the Court of Appeals. This petition have been living in FooKien, China before he went to the
was initially denied by the Supreme Court on June 22, 1981. Upon motion of Philippines on several occasions; that the practice during the time of
the petitioners the Court in a resolution dated September 16, 1981 her marriage was a written document [is exchanged] just between
reconsidered the denial and decided to give due course to this petition. the parents of the bride and the parents of the groom, or any elder
for that matter; that in China, the custom is that there is a go-
ISSUE/s between, a sort of marriage broker who is known to both parties who
WoN the CA erred in declaring that the marriage between Sy Kiat and Yao Kee would talk to the parents of the bride-to-be; that if the parents of the
has not been proven valid in accordance with the laws of China – NO the CA did bride-to-be agree to have the groom-to-be their son in-law, then they
not err, Yao Kee et al. did not present any competent evidence relative to the law and agree on a date as an engagement day; that on engagement day, the
custom of China on marriage. The testimonies of Yao and Gan Ching cannot be parents of the groom would bring some pieces of jewelry to the
considered as proof of China's law or custom on marriage not only because they are parents of the bride-to-be, and then one month after that, a date
self-serving evidence, but more importantly, there is no showing that they are would be set for the wedding, which in her case, the wedding date
competent to testify on the subject matter. to Sy Kiat was set on January 19, 1931; that during the wedding the
bridegroom brings with him a couch (sic) where the bride would ride
WoN CA erred in declaring Sy-Gonzles et al. as natural children of Sy Kiat with and on that same day, the parents of the bride would give the dowry
Asuncion Gillego – No, private respondents, Sy-Gonzales are also the deceased's for her daughter and then the document would be signed by the
acknowledged natural children with Asuncion Gillego, a Filipina with whom he lived parties but there is no solemnizing officer as is known in the
for twenty-five (25) years without the benefit of marriage. They have in their favor Philippines; that during the wedding day, the document is signed
their father's acknowledgment, evidenced by a compromise agreement entered into by only by the parents of the bridegroom as well as by the parents of
and between their parents and approved by the Court of First Instance on February 12, the bride; that the parties themselves do not sign the document; that
1974 wherein Sy Kiat not only acknowleged them as his children by Asuncion Gillego the bride would then be placed in a carriage where she would be
but likewise made provisions for their support and future inheritance brought to the town of the bridegroom and before departure the bride
would be covered with a sort of a veil; that upon reaching the town
RULING: WHEREFORE, the decision of the Court of Appeals is hereby of the bridegroom, the bridegroom takes away the veil; that during
AFFIRMED. her wedding to Sy Kiat (according to said Chinese custom), there
were many persons present; that after Sy Kiat opened the door of the
 carriage, two old ladies helped her go down the carriage and brought 10. The law requires that "a custom must be proved as a fact, according to the
her inside the house of Sy Mat; that during her wedding, Sy Chick, rules of evidence" On this score the Court had occasion to state that "a local
the eldest brother of Sy Kiat, signed the document with her mother; custom as a source of right can not be considered by a court of justice unless
that as to the whereabouts of that document, she and Sy Mat were such custom is properly established by competent evidence like any other
married for 46 years already and the document was left in China fact" The same evidence, if not one of a higher degree, should be required of
and she doubt if that document can still be found now; that it was a foreign custom.
left in the possession of Sy Kiat's family; that right now, she does 11. The law on foreign marriages is provided by Article 71 of the Civil Code
not know the whereabouts of that document because of the lapse of which states that:
many years and because they left it in a certain place and it was a. Art. 71. All marriages performed outside the Philippines in
already eaten by the termites; that after her wedding with Sy Kiat, accordance with the laws in force in the country where they were
they lived immediately together as husband and wife, and from then performed and valid there as such, shall also be valid in this
on, they lived together; that Sy Kiat went to the Philippines country, except bigamous, Polygamous, or incestuous marriages, as
sometime in March or April in the same year they were married; that determined by Philippine law.
she went to the Philippines in 1970, and then came back to China; 12. Construing this provision of law the Court has held that to establish a valid
that again she went back to the Philippines and lived with Sy Mat as foreign marriage two things must be proven, namely: (1) the existence of the
husband and wife; that she begot her children with Sy Kiat during foreign law as a question of fact; and (2) the alleged foreign marriage by
the several trips by Sy Kiat made back to China. convincing evidence
3. Second, the testimony of Gan Ching, a younger brother of Yao Kee who 13. In proving a foreign law the procedure is provided in the Rules of Court. With
stated that he was among the many people who attended the wedding of his respect to an unwritten foreign law, Rule 130 section 45 states that:
sister with Sy Kiat and that no marriage certificate is issued by the Chinese a. SEC. 45. Unwritten law.—The oral testimony of witnesses, skilled
government, a document signed by the parents or elders of the parties being therein, is admissible as evidence of the unwritten law of a foreign
sufficient country, as are also printed and published books of reports of
4. Third, the statements made by Asuncion Gillego when she testified before decisions of the courts of the foreign country, if proved to be
the trial court to the effect that (a) Sy Mat was married to Yao Kee according commonly admitted in such courts.
to Chinese custom; and, (b) Sy Kiat's admission to her that he has a Chinese 14. Proof of a written foreign law, on the other hand, is provided for under Rule
wife whom he married according to Chinese custom 132 section 25, thus:
5. Fourth, Sy Kiat's Master Card of Registered Alien issued in Caloocan City a. SEC. 25. Proof of public or official record.—An official record or
on October 3, 1972 where the following entries are found: "Marital status— an entry therein, when admissible for any purpose, may be
Married"; "If married give name of spouses—Yao Kee"; "Address-China; evidenced by an official publication thereof or by a copy attested by
"Date of marriage—1931"; and "Place of marriage—China" the officer having the legal custody of the record, or by his deputy,
6. Fifth, Sy Kiat's Alien Certificate of Registration issued in Manila on January and accompanied, if the record is not kept in the Philippines, with a
12, 1968 where the following entries are likewise found: "Civil status— certificate that such officer has the custody. If the office in which
Married"; and, 'If married, state name and address of spouse—Yao Kee the record is kept is in a foreign country, the certificate may be made
Chingkang, China" by a secretary of embassy or legation, consul general, consul, vice
7. And lastly, the certification issued in Manila on October 28, 1977 by the consul, or consular agent or by any officer in the foreign service of
Embassy of the People's Republic of China to the effect that "according to the Philippines stationed in the foreign country in which the record
the information available at the Embassy Mr. Sy Kiat a Chinese national and is kept and authenticated by the seal of his office.
Mrs. Yao Kee alias Yui Yip also Chinese were married on January 19, 1931 15. The Court has interpreted section 25 to include competent evidence like the
in Fukien, the People's Republic of China” testimony of a witness to prove the existence of a written foreign law
8. These evidence may very well prove the fact of marriage between Yao Kee 16. In the case at bar Yao Kee et al. did not present any competent evidence
and Sy Kiat. However, the same do not suffice to establish the validity of said relative to the law and custom of China on marriage. The testimonies of Yao
marriage in accordance with Chinese law or custom. and Gan Ching cannot be considered as proof of China's law or custom on
9. Custom is defined as "a rule of conduct formed by repetition of acts, marriage not only because they are
uniformly observed (practiced) as a social rule, legally binding and obligatory self-serving evidence, but more importantly, there is no showing that they are
 competent to testify on the subject matter. For failure to prove the foreign law 1. On the record is the testimony of Asuncion Gillego that Sy Kiat told her he
or custom, and consequently, the validity of the marriage in accordance with has three daughters with his Chinese wife, two of whom—Sook Wah and Sze
said law or custom, the marriage between Yao Kee and Sy Kiat cannot be Kai Cho—she knows, and one adopted son
recognized in this jurisdiction. 2. However, as petitioners, Yao Kee, failed to establish the marriage of Yao Kee
17. Petitioners contend that contrary to the Court of Appeals' ruling they are not with Sy Mat according to the laws of China, they cannot be accorded the
duty bound to prove the Chinese law on marriage as judicial notice thereof status of legitimate children but only that of acknowledged natural children.
had been taken by this Court in the case of Sy Joc Lieng v. Sy Quia 3. Petitioners (children of Yao Kee) are natural children, it appearing that at the
18. This contention is erroneous. Well-established in this jurisdiction is the time of their conception Yao Kee and Sy Kiat were not disqualified by any
principle that Philippine courts cannot take judicial notice of foreign laws. impediment to marry one another
They must be alleged and proved as any other fact 4. And they are acknowledged children of the deceased because of Sy Kiat's
19. Moreover a reading of said case would show that the party alleging the recognition of Sze Sook and its extension to Sze Lai Cho and Sy Chun Yen
foreign marriage presented a witness, one Li Ung Bieng, to prove that who are her sisters of the full blood
matrimonial letters mutually exchanged by the contracting parties constitute 5. Private respondents, Sy-Gonzales et al., on the other hand are also the
the essential requisite for a marriage to be considered duly solemnized in deceased's acknowledged natural children with Asuncion Gillego, a Filipina
China. Based on his testimony, which as found by the Court is uniformly with whom he lived for twenty-five (25) years without the benefit of
corroborated by authors on the subject of Chinese marriage, what was left to marriage.
be decided was the issue of whether or not the fact of marriage in accordance 6. They have in their favor their father's acknowledgment, evidenced by a
with Chinese law was duly proven compromise agreement entered into by and between their parents and
20. Further, even assuming for the sake of argument that the Court has indeed approved by the Court of First Instance on February 12, 1974 wherein Sy
taken judicial notice of the law of China on marriage in the aforecited case, Kiat not only acknowleged them as his children by Asuncion Gillego but
petitioners however have not shown any proof that the Chinese law or custom likewise made provisions for their support and future inheritance
obtaining at the time the Sy Joc Lieng marriage was celebrated in 1847 was
still the law when the alleged marriage of Sy Kiat to Yao Kee took place in
1931 or eighty-four (84) years later.
21. Petitioners moreover cite the case of U.S. v. Memoracion as being applicable
to the instant case. They aver that the judicial pronouncement in the
Memoracion case, that the testimony of one of the contracting parties is
competent evidence to show the fact of marriage, holds true in this case.
22. The Memoracion case however is not applicable to the case at bar as said case
did not concern a foreign marriage and the issue posed was whether or not
the oral testimony of a spouse is competent evidence to prove the fact of
marriage in a complaint for adultery.
23. Accordingly, in the absence of proof of the Chinese law on marriage, it should
be presumed that it is the same as ours
24. Since Yao Kee admitted in her testimony that there was no solemnizing
officer as is known here in the when her alleged marriage to Sy Mat was
celebrated, it therefore follows that her marriage to Sy Kiat, even if true,
cannot be recognized in this jurisdiction.

On the issue of CA’s declaration that Sy-Gonzales et al are the natural children of Sy
Kiat:
 014 BANK OF AMERICA vs. AMERICAN REALTY CORP. (Esguerra) Additionally, prohibitive laws concerning persons, their acts or property, and those
G.R. No. 133876 | December 29, 1999 | Buena, J. | Exceptions to the application of which have for their object public order, public policy and good customs shall not be
foreign law rendered ineffective by laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country. (Article 17, par. 3, Civil Code.)
PETITIONERS: BANK OF AMERICA, NT and SA (BANTSA)
RESPONDENTS: AMERICAN REALTY CORPORATION (ARC) and COURT OF
APPEALS

SUMMARY: BANTSA (US corp.) granted loans to different Panama corporations

affiliated with ARC. These corporations defaulted. Thus they had a restructuring FACTS:
agreement, whereby ARC executed two real estate mortgages over its parcels of land in 1. Bank of America NT & SA (BANTSA) is an international banking and
Bulacan, as additional security. Again, the parties defaulted. Thus, BANTSA filed civil financing institution duly licensed to do business in the Philippines,
actions against these borrowers (excluding ARC) before HK and England courts. organized and existing under and by virtue of the laws of the State of
Thereafter, BANTSA filed before the Provincial Sheriff of Bulacan an application for California.
extrajudicial foreclosure of the subject properties. This was granted, and the properties 2. American Realty Corporation (ARC) is a domestic corporation.
were foreclosed and eventually sold to Integrated Credit (ICCS), which later sold it to 3. Bank of America International Limited (BAIL), on the other hand, is a limited
another corporation. Thus, ARC filed an action before the RTC Pasig for damages for liability company organized and existing under the laws of England (not a
BANTSA’s act of foreclosing the mortgage despite the pendency of civil actions abroad. party in the Philippine suit)
BANTSA claims that this is allowed under the English law (to file civil action for 4. BANTSA and BAIL, on several occasions, granted three major multi-million
collection, and foreclose at the same time) US Dollar loans to the following corporate borrowers: (1) Liberian Transport
Navigation, S.A.; (2) El Challenger S.A. and (3) Eshley Compania Naviera
Do we apply the English law? No. S.A., all of which are existing under and by virtue of the laws of the Republic
of Panama and are foreign affiliates of ARC.
First of all, under our jurisdiction, the remedies of personal action for collection, on 5. Due to the default in the payment of the loan amortizations, BANTSA and
one hand, and foreclosure, on the other hand, are alternative and not cumulative. An the corporate borrowers signed and entered into restructuring agreements. As
election of one remedy operates as a waiver of the other. In relation to the application of additional security for the restructured loans, ARC as third party mortgagor
English law, the Court said that we do not take judicial notice of a foreign law, thus it executed two real estate mortgages, dated 17 February 1983 and 20 July
1984, over its parcels of land including improvements thereon, located at
must be properly pleaded and proved. But, even if it is pleaded and proved, that law
Barrio Sto. Cristo, San Jose Del Monte, Bulacan.
cannot be applied in this case, because (see doctrine)… 6. Eventually, the corporate borrowers defaulted in the payment of the
restructured loans prompting BANTSA to file civil actions before foreign
DOCTRINE: Foreign law would not find applicability when it is contrary to a sound courts46 for the collection of the principal loan. However, in these civil suits,
and established public policy of the forum. The public policy sought to be protected in ARC, being a third party mortgagor, was not impleaded as party-defendant.
the instant case is the principle imbedded in our jurisdiction proscribing the splitting up 7. On 16 December 1992, BANTSA filed before the Office of the Provincial
of a single cause of action. Sheriff of Bulacan an application for extrajudicial foreclosure of real estate

46
a) In England, in its High Court of Justice, Queens Bench Division, Commercial Court (1992- c) In Hongkong, in the Supreme Court of Hongkong High Court (Action No. 4039 of 1992) against
Folio No. 2098) against Liberian Transport Navigation S.A., Eshley Compania Naviera S.A., El Eshley Compania Naviera S.A., El Challenger S.A., Espriona Shipping Company S.A. Pacific
Challenger S.A., Espriona Shipping Company S.A., Eddie Navigation Corp., S.A., Eduardo Navigators Corporation, Eddie Navigation Corporation S.A., Litonjua Chartering (Edyship) Co.,
Katipunan Litonjua and Aurelio Katipunan Litonjua on June 17, 1992. Inc., Aurelio Katipunan Litonjua, Jr. and Eduardo Katipunan Litonjua on November 19, 1992; and
b) In England, in its High Court of Justice, Queens Bench Division, Commercial Court (1992-Folio d) In Hongkong, in the Supreme Court of Hongkong High Court (Action No. 4040 of 1992) against
No. 2245) against El Challenger S.A., Espriona Shipping Company S.A., Eduardo Katipuan Eshley Compania Naviera S.A., El Challenger S.A., Espriona Shipping Company, S.A., Pacific
Litonjua & Aurelio Katipunan Litonjua on July 2, 1992; Navigators Corporation, Eddie Navigation Corporation S.A., Litonjua Chartering (Edyship) Co.,
Jr. and Eduardo Katipunan Litonjua on November 21, 1992.
 mortgage. mortgages. Consequently, ARC’s rights as owner and possessor of the properties
8. On 22 January 1993, after due publication and notice, the mortgaged real were violated when BANTSA caused the extrajudicial foreclosure of the
properties were sold at public auction in an extrajudicial foreclosure sale, mortgages constituted thereon.
with Integrated Credit and Corporation Services Co. (ICCS) as the highest
2. The court ordered BANTSA to pay ARC the following: 1) Actual or
bidder for the sum of P24 million. After a year, ICCS consolidated its
ownership over the real properties, resulting to the issuance of Transfer compensatory damages in the amount of P99 million; and 2) Exemplary damages
Certificates of Title (TCTs) in its name. ICCS thereafter sold the real in the amount of P5 million.
properties to Stateland Investment Corporation for the amount of P39
million. Accordingly, TCTs were issued in the latters name. CA’s RULING:
9. On 12 February 1993, ARC filed before the Pasig RTC an action for 4. CA affirmed the assailed decision of the lower court. (MR denied also)
damages against BANTSA, for the latter’s act of foreclosing
extrajudicially the real estate mortgages despite the pendency of civil ISSUE:
suits before foreign courts for the collection of the principal loan. Whether or not BANTSA’s act of filing a collection suit against the principal debtors
BANTSA’s ARGUMENT: (borrowers) for the recovery of the loan before foreign courts constituted a waiver of
1. The rule prohibiting the mortgagee from foreclosing the mortgage after an ordinary the remedy of foreclosure (In relation to our syllabus, the question is, do we follow
suit for collection has been filed, is not applicable in the present case, claiming English law which does NOT bar the remedy of foreclosure of mortgage despite
that: institution of civil action for collection of sum of money?) A: The filing of collection
a) ARC, being a mere third party mortgagor and not a party to the principal of money suit bars the remedy of foreclosure
restructuring agreements, was never made a party defendant in the civil cases
filed in Hongkong and England; RULING: WHEREFORE, the instant petition is DENIED for lack of merit. The
b) There is actually no civil suit for sum of money filed in the Philippines since decision of the Court of Appeals is AFFIRMED with MODIFICATION of the amount
the civil actions were filed in Hongkong and England. As such, any decision awarded as exemplary damages.
which may be rendered in the foreign courts is not enforceable in the Philippines
unless a separate action to enforce the foreign judgments is first filed in the RATIO:
1. The Court has laid down the rule that a mortgage creditor may institute
Philippines, pursuant to Rule 39, Section 50 of the Revised Rules of Court.
against the mortgage debtor either a personal action for debt or a real action
c) Under English Law, which is the governing law under the principal agreements, to foreclose the mortgage. In our jurisdiction, these remedies are deemed
the mortgagee does not lose its security interest by filing civil actions for sums alternative and not cumulative. Notably, an election of one remedy operates
of money. as a waiver of the other. For this purpose, a remedy is deemed chosen upon
2. A waiver of the remedy of foreclosure requires the concurrence of two requisites: the filing of the suit for collection or upon the filing of the complaint in an
an ordinary civil action for collection should be filed and subsequently a final action for foreclosure of mortgage, pursuant to the provision of Rule 68 of
the 1997 Rules of Civil Procedure. As to extrajudicial foreclosure, such
judgment be correspondingly rendered therein. The mere filing of a personal action to
remedy is deemed elected by the mortgage creditor upon filing of the petition
collect the principal loan does not suffice; a final judgment must be secured and not with any court of justice but with the Office of the Sheriff of the province
obtained in the personal action so that waiver of the remedy of foreclosure may be where the sale is to be made, in accordance with the provisions of Act No.
appreciated. To put it differently, absent any of the two requisites, the mortgagee- 3135, as amended by Act No. 4118.
creditor is deemed not to have waived the remedy of foreclosure. 2. Contrary to BANTSA’s arguments, the mere act of filing of an ordinary
action for collection operates as a waiver of the mortgage-creditors remedy
RTC’s RULING: to foreclose the mortgage. In the present case, by the mere filing of the
1. The lower court rendered a decision in favor of ARC dated 12 May 1993, ordinary action for collection against the principal debtors, BANTSA is
deemed to have elected a remedy, as a result of which a waiver of the other
declaring that the filing in foreign courts by BANTSA of collection suits against
necessarily must arise. Corollarily, no final judgment in the collection suit is
the principal debtors (the borrowers) operated as a waiver of the security of the required for the rule on waiver to apply.
 3. Applying the foregoing rules, BANTSA, by the expediency of filing four of action, the filing of one or a judgment upon the merits in any one is
civil suits before foreign courts, necessarily abandoned the remedy to available as a ground for the dismissal of the others.
foreclose the real estate mortgages constituted over the properties of 9. Moreover, foreign law should not be applied when its application would
ARC. Moreover, by filing the four civil actions and by eventually foreclosing
work undeniable injustice to the citizens or residents of the forum. To
extrajudicially the mortgages, BANTSA in effect transgressed the rules
against splitting a cause of action well-enshrined in jurisprudence and our give justice is the most important function of law; hence, a law, or judgment
statute books. or contract that is obviously unjust negates the fundamental principles of
4. Notably, it is not the nature of the redress which is crucial but the efficacy of Conflict of Laws.
the remedy chosen in addressing the creditors cause. Hence, a suit brought
before a foreign court having competence and jurisdiction to entertain the **Note: There were discussions on damages, but basically Court said that it gives
action is deemed, for this purpose, to be within the contemplation of the due respect to the findings of the trial court, and it was sufficient that BANTSA
remedy available to the mortgagee-creditor (BANTSA). This pronouncement
was afforded the opportunity to refute the evidence presented by ARC.
would best serve the interest of justice and fair play and further discourage
the noxious practice of splitting up a lone cause of action.

Does the English law apply (which provides that the mortgagee does not lose its
right to foreclose by simply filing civil actions for sums of money)? NO

5. In a long line of decisions, the Court adopted the well-imbedded principle in

our jurisdiction that there is no judicial notice of any foreign law. A foreign
law must be properly pleaded and proved as a fact. Thus, if the foreign law
involved is not properly pleaded and proved, our courts will presume that the
foreign law is the same as our local or domestic or internal law. This is what
we refer to as the doctrine of processual presumption.
6. In the instant case, assuming arguendo that the English Law on the matter
were properly pleaded and proved in accordance with Section 24, Rule 132
of the Rules of Court,47 said foreign law would still not find applicability
when it is contrary to a sound and established public policy of the forum.
7. Additionally, prohibitive laws concerning persons, their acts or property,
and those which have for their object public order, public policy and good
customs shall not be rendered ineffective by laws or judgments
promulgated, or by determinations or conventions agreed upon in a foreign
country. (Article 17, par. 3, Civil Code.)
8. The public policy sought to be protected in the instant case is the
principle imbedded in our jurisdiction proscribing the splitting up of a
single cause of action. Section 4, Rule 2 of the 1997 Rules of Civil Procedure
is pertinent -If two or more suits are instituted on the basis of the same cause

47
Section 24. Proof of official record. — The record of public documents referred to in paragraph may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or
(a) of Section 19, when admissible for any purpose, may be evidenced by an official publication consular agent or by any officer in the foreign service of the Philippines stationed in the foreign
thereof or by a copy attested by the officer having the legal custody of the record, or by his country in which the record is kept, and authenticated by the seal of his office.
deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such
officer has the custody. If the office in which the record is kept is in foreign country, the certificate
 001 IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. 1. Edward Christensen (Edward), born in New York on Nov. 29, 1975, migrated
CHRISTENSEN (SIAPNO edited by FORDAN) to California where he resided and consequently was considered citizen
Jan. 31, 1963 | Labrador, J. | Renvoi Doctrine thereof. He came to the Philippines where he became a domiciliary until the
time of his death on Apr. 30, 1953. However, during the entire period of his
residence in this country, he had always considered himself a citizen of
EXECUTOR and HEIR-APPELLEES: In the Matter of the Testate Estate of California.
Edward E. Christensen, Deceased; Adolfo C. Aznar, Executor; and Lucy 2. In his will 48 , executed in Manila on Mar. 5, 1951, Edward instituted his
Christensen, Heir of the deceased
daughter Maria Lucy Christensen (Lucy) as his only heir, but left a legacy of
OPPOSITOR-APPELLANT: Helen Christensen Garcia
P3600 in favor of Helen Christensen Garcia (Helen), who was described as
"not in any way related to" him.
SUMMARY: Edward was born in New York but he migrated to California where
3. It is in accordance with the above-quoted provisions that the executor in his
he resided for a period of 9 years. He came to the Philippines where he became a
final account and project of partition ratified the payment of P3,600 to Helen
domiciliary until his death. In his will, he declared to have only one child (natural
and proposed that the residue of the estate be transferred to Lucy.
daughter), Lucy, as his only heir. However, he left a sum of money in favor of
4. But in a separate decision, SC declared Helen as an acknowledged natural
Helen, an acknowledged natural child, though not in any way related to the daughter of Edward. Thus, Helen alleged the following legal grounds of
deceased. Helen claims that under Art. 16 of the Civil Code, California law should opposition:
be applied. However, Art. 946 of the Civil Code of California states that “If there a. that the distribution should be governed by the laws of the Philippines, and
is no law to the contrary, in the place where personal property is situated, it is b. that said order of distribution is contrary thereto insofar as it denies her, one
deemed to follow the person of its owner, and is governed by the law of his
of 2 acknowledged natural children, ½ of the estate in full ownership.
domicile.”
5. Helen further claims that under Art. 16 of the Civil Code, the California law
should be applied, and the question of the validity of the testamentary provision
The issue is whether or not the national law of the deceased should be applied in
should thus be referred back to the law of the decedent’s domicile, which is the
determining the successional rights of his heirs. YES. Art. 16 of the Civil Code
Philippines.
states that successional rights are determined by the national law of the country
6. Helen also invokes the provisions of Art. 946 of the Civil Code of California,
where the deceased is a citizen. The internal law of California distinguishes the
which states that: “If there is no law to the contrary, in the place where
rule to be applied to Californians domiciled in California and for Californians personal property is situated, it is deemed to follow the person of its owner,
domiciled outside of California. For Californians residing in other jurisdiction, and is governed by the law of his domicile.” Accordingly, her share must be
the law of said country must apply. Edward, being domiciled in the Philippines, increased in view of successional rights of illegitimate children under
the law of his domicile must be followed. The case was remanded to the lower Philippine laws.
court for further proceedings – the determination of the successional rights under
7. On the other hand, the executor and Lucy argue that the national law of the
Philippine law only. The conflicts of law rule in California Civil Code (Art. 946)
deceased must apply and, thus, the courts must apply internal law of California
authorize the return of question of law to the testator’s domicile. The court must
on the matter. Under California law, there are no compulsory heirs and
then apply its own rule in the Philippines as directed in the conflicts of law rule
consequently a testator may dispose of his property by will in the form and
in California, otherwise the case/issue will not be resolved if the issue is referred
manner he desires (Kaufman).
back and forth between 2 states.
ISSUE: Whether or not the national law of the deceased should be applied in
DOCTRINE: The recognition of the renvoi theory implies that the rules of the
determining the successional rights of his heirs -YES, pursuant to Art. 16 of the Civil
conflict of laws are to be understood as incorporating not only the ordinary or Code but since California Civil Code refers back to the law of domicile of its resident,
internal law of the foreign state or country, but its rules of the conflict of laws as Philippine law will govern.
well.

FACTS:

48
Kindly see end of digest for the details.
RULING: The decision appealed from is hereby reversed and the case returned to the law applicable to its citizens only and in force only within the state. The
lower court with instructions that the partition be made as the Philippine law on “national law” indicated in Art. 16 of the Civil Code above-quoted can not,
succession provides. Judgment reversed, with costs against the executor and Lucy. therefore, possibly mean or apply to any general American law. So it can refer
to no other than the private law of the State of California.
RATIO: 7. Helen invoked that Art. 946 of the Civil Code of California49 should be applied
Edward was a US Citizen but is a domicile in the Philippines at the time of his death and in accordance therewith and following the doctrine of renvoi, the question
1. In arriving at the conclusion that the domicile of the deceased is the of the validity of the testamentary provision in question should be referred back
Philippines, SC was persuaded by the fact that he was born in New York, to the law of the decedent’s domicile, which is Philippines.
migrated to California and resided there for 9 years, and since he came to the 8. On the other hand, the executor and Lucy cited the case of Kaufman where the
Philippines in 1913 he returned to California very rarely and only for short under the California Probate Court, a testator amy dispose of his property by
visits (perhaps to relatives), and considering that he appears never to have will in the form and manner he desires. Since Edward was a citizen of the State
owned or acquired a home or properties in that state, which would indicate of California, the internal law should govern the determination of the validity
that he would ultimately abandon the Philippines and make home in the State of the his testamentary provisisions.
of California.
*Read discussion on theory or doctrine of renvoi first before proceeding*
2. Residence is a term used with many shades of meaning from mere temporary
presence to the most permanent abode. Generally, however, it is used to denote 9. Art. 946 of the California Civil Code is its conflict of laws rule while the rule
something more than mere physical presence. (Sec. 16, Goodrich on Conflict applied in In re Kaufman, supra, is its internal law. If the law on succession and
of Laws) the conflict of law rules of California are to be enforced jointly, each in its own
3. As to his citizenship, however, SC found that the citizenship that he acquired intended and appropriate sphere, the principle cited In re Kaufman should apply
in California when he resided in Sacramento, California from 1904-1913, was to citizens living in the State, but Art. 946 should apply to such of its citizens
never lost by his stay in the Philippines, for the latter was a territory of the as are not domiciled in California but in other jurisdictions.
United States (not a state) until 1946 and the deceased appears to have 10. The rule laid down of resorting to the law of the domicile in the determination
considered himself as a citizen of California by the fact that when he executed of matters with foreign element involved is in accord with the general principle
his will in 1951 he declared that he was a citizen of that State; so that he appears of American law that the domiciliary law should govern in most matters or
never to have intended to abandon his California citizenship by acquiring rights which follow the person of the owner.
another. 11. Thus, the the laws of California have prescribed 2 sets of laws for its citizens,
one for residents therein and another for those domiciled in other jurisdictions.
Philippine law governs 12. The national law mentioned in Art. 16 of our Civil Code is the law on conflict
4. The law that governs the validity of his testamentary dispositions is defined in of laws in the California Civil Code, i.e., Art. 946, which authorizes the
Art. 16 of the Civil Code of the Philippines, which states that: reference or return of the question to the law of the testator's domicile. The
“ART. 16. Real property as well as personal property is subject to the law of conflict of laws rule in California, Art. 946, Civil Code, precisely refers back
the country where it is situated. the case, when a decedent is not domiciled in California, to the law of his
However, intestate and testamentary successions, both with respect to the domicile, which is the Philippines in the case at bar.
order of succession and to the amount of successional rights and to the 13. The court of domicile cannot and should not refer the case back to California;
intrinsic validity of testamentary provisions, shall be regulated by the national
such action would leave the issue incapable of determination because the case
law of the person whose succession is under consideration, whatever may be
the nature of the property and regardless of the country wherein said property will then be like a football, tossed back and forth between 2 states, between
may be found.” country of which the decedent was a citizen and the country of his domicile.
5. However, the application of above article requires the determination of the 14. Thus, the Philippine court therefore must apply its own law as directed in the
meaning of the term “national law” as used therein. conflict of laws rule of the state of the decedent.
6. There is no single American law governing the validity of testamentary 15. As the domicile of Edward, a citizen of California, is the Philippines, the
provisions in the United States, each state of the Union having its own private validity of the provisions of his will depriving his acknowledged natural child,

49
Art. 946: "If there is no law to the contrary, in the place where personal property is situated, it is deemed
to follow the person of its owner, and is governed by the law of his domicile."
 Helen, should be governed by the Philippine law, the domicile, pursuant to Art. law of the foreign state or country, but its rules of the conflict of laws as well.
946 of the Civil Code of California, not by the internal law of California. According to this theory 'the law of a country' means the whole of its law.
Therefore:
Theory or Doctrine of Renvoi: 1. Every court shall observe the law of its country as regards the application
of foreign laws.
a. The problem has been stated in this way: “When the Conflict of Laws rule of 2. Provided that no express provision to the contrary exists, the court shall
the forum refers a jural matter to a foreign law for decision, is the reference to respect:
the corresponding rule of the Conflict of Law of that foreign law, or is the a. The provisions of a foreign law which disclaims the right to bind its
reference to the purely internal rules of law of the foreign system; i.e., to the nationals abroad as regards their personal statute, and desires that
totality of the foreign law, minus its Conflict of Laws rules?” said personal statute shall be determined by law of the domicile, or
b. To illustrate: X, a citizen of Massachusetts, dies intestate, domiciled in France, even by the law of the place where the act in question occurred.
leaving movable property in Massachusetts, England, and France. The question b. The decision of two or more foreign systems of law, provided it be
certain that one of them is necessarily competent, which agree in
arises as to how this property is to be distributed among X's next of kin.
attributing the determination of a question to the same system of
Ø Assume (1) that this question arises in a Massachusetts court. There the rule law.
of the conflict of laws as to intestate succession to movables calls for an
application of the law of the deceased's last domicile. Since by hypothesis xxx xxx xxx
X's last domicile was France, the natural thing for the Massachusetts court If, for example, the English Law directs its judge to distribute the personal
to do would be to turn to French statute of distributions, or whatever estate of an Englishman who has died domiciled in Belgium in accordance
corresponds thereto in French law, and decree a distribution accordingly. with the law of his domicile, he must first inquire whether the law of Belgium
An examination of French law, however, would show that if a French court would distribute personal property upon death in accordance with the law of
were called upon to determine how this property should be distributed, it domicile, and if he finds that the Belgian law would make the distribution in
accordance with the law of nationality — that is the English law, — he must
would refer the distribution to the national law of the deceased, thus
accept this reference back to his own law.
applying the Massachusetts statute of distributions. So on the surface of
things the Massachusetts court has open to it alternative course of action: CONTENTS OF THE WILL:
(a) either to apply the French law is to intestate succession, or (b) to resolve "3. I declare . . . that I have but one (1) child, named Maria Lucy Christensen (now Mrs.
itself into a French court and apply the Massachusetts statute of Bernard Daney), who was born in the Philippines about twenty-eight years ago, and
distributions, on the assumption that this is what a French court would do. who is now residing at No. 665 Rodger Young Village, Los Angeles, California, U.S.A.
If it accepts the so-called renvoi doctrine, it will follow the latter course, "4. I further declare that I now have no living ascendants, and no descendents except my
thus applying its own law. above named daughter, Maria Lucy Christensen Daney.
Ø This is one type of renvoi. A jural matter is presented which the conflict-of- xxx xxx xxx
"7. I give, devise and bequeath unto Maria Helen Christensen, now married to Eduardo
laws rule of the forum refers to a foreign law, the conflict-of-laws rule of
Garcia, about eighteen years of age and who, notwithstanding the fact that she was
which, in turn, refers the matter back again to the law of the forum. This is baptized Christensen, is not in any way related to me, nor has she been at any time
renvoi in the narrower sense. The German term for this judicial process is adopted by me, and who, from all information I have now resides in Egpit, Digos,
'Ruckverweisung.' Davao, Philippines, the sum of Three Thousand Six Hundred Pesos (P3,600.00),
c. Another theory, known as the "doctrine of renvoi", has been advanced. The Philippine Currency, the same to be deposited in trust for the said Maria Helen
theory of the doctrine of renvoi is that the court of the forum, in determining Christensen with the Davao Branch of the Philippine National Bank, and paid to her at
the question before it, must take into account the whole law of the other the rate of One Hundred Pesos (P100.00), Philippine Currency per month until the
jurisdiction, but also its rules as to conflict of laws, and then apply the law to principal thereof as well as any interest which may have accrued thereon, is exhausted.
the actual question which the rules of the other jurisdiction prescribe. This may xxx xxx xxx
"12. I hereby give devise and bequeath unto my well-beloved daughter, the said Maris Lucy
be the law of the forum. BUT this doctrine of renvoi has generally been
Christensen Daney (Mrs. Bernard Daney), now residing as aforesaid at No. 665 Rodger
repudiated by the American authorities. Young Village, Los Angeles, California, U.S.A., all the income from the rest,
d. Prof. Lorenzen, in an article in the Yale Law Journal, defined the scope of the remainder, and residue of my property and estate, real, personal and/or mixed, of
theory of renvoi and the reasons for its application: whatsoever kind or character, and wheresoever situated, of which I may be possessed
"The recognition of the renvoi theory implies that the rules of the conflict of at my death and which may have come to me from any source whatsoever, during her
laws are to be understood as incorporating not only the ordinary or internal lifetime: . . .
010 AZNAR v. CHRISTENSEN-GARCIA (SIAPNO edited by GALINDEZ)
January 31, 1963 | Labrador, J. | Renvoi Doctrine FACTS:
1. Edward Christensen, born in New York, migrated to California where he
PETITIONER: IN THE MATTER OF THE TESTATE ESTATE OF resided and consequently was considered citizen thereof. He came to the
EDWARD E. CHRISTENSEN, DECEASED. ADOLFO C. AZNAR, Executor Philippines where he became a domiciliary until the time of his death.
and LUCY CHRISTENSEN, Heir of the deceased However, during the entire period of his residence in this country, he had
RESPONDENTS: HELEN CHRISTENSEN GARCIA always considered himself a citizen of California.
2. In his will, Edward instituted his daughter Maria Lucy Christensen as his
SUMMARY: Edward Christensen was born in New York but he migrated to only heir, but left a legacy of P3600 in favor of Helen Christensen Garcia
California where he resided for a period of 9 years. He came to the Philippines who, in his will was described as "not in any way related to" him.
where he became a domiciliary until his death. In his will, he declared to have 3. It is in accordance with the above-quoted provisions that the executor in his
only one child (natural daughter) Maria Lucy Christensen as his only heir. But he final account and project of partition ratified the payment of only P3,600 to
left a legacy of a sum of money in favor of Helen Christensen Garcia who Edward Helen Christensen Garcia and proposed that the residue of the estate be
described in his will as not in any way related to him. In a separate decision, the transferred to his daughter, Maria Lucy Christensen.
SC declared Helen as Edward’s acknowledged natural daughter. Hence, 4. But in a separate decision, the Supreme Court declared Helen as an
acknowledged natural daughter of Edward.
Helen claims that under Article 16 of the Civil Code, California law should be 5. Helen filed an opposition to the approval of the project of partition alleging
applied. However, Article 946 of the Civil Code of California states that “If there that such deprives her of her legitime.
is no law to the contrary, in the place where personal property is situated, it is 6. The legal grounds of the opposition: (a) that the distribution should be
deemed to follow the person of its owner, and is governed by the law of his governed by the laws of the Philippines, and (b) that said order of distribution
domicile.” ISSUE: Whether or not the national law of the deceased should be is contrary thereto insofar as it denies to Helen Christensen, one of two
applied in determining the successional rights of his heirs - Yes. Article 16 of the acknowledged natural children, one-half of the estate in full ownership.
Civil Code states that successional rights are determined by the national law of 7. In amplification of the above grounds it was alleged that the law that should
the country where the deceased is a citizen hence the internal law of California. govern the estate of the deceased Christensen should not be the internal law
Said internal law distinguishes the rule to be applied to Californians domiciled in of California alone, but the entire law thereof because several foreign
California and for Californians domiciled outside of California. For Californians elements are involved, that the forum is the Philippines and even if the case
residing in other jurisdiction, the law of said country must apply. Edward were decided in California, Section 946 of the California Civil Code, which
Christensen being domiciled in the Philippines, the law of his domicile must be requires that the domicile of the decedent should apply, should be applicable.
followed. The case was remanded to the lower court for further proceedings – the 8. It was also alleged that Maria Helen Christensen having been declared an
determination of the successional rights under Philippine law only. The conflicts acknowledged natural child of the decedent, she is deemed for all purposes
of law rule in CA (Art. 946) authorize the return of question of law to the testator’s legitimate from the time of her birth.
domicile. The court must apply its own rule in the Philippines as directed in the 9. The court below ruled that as Edward E. Christensen was a citizen of the
conflicts of law rule in CA, otherwise the case/issue will not be resolved if the United States and of the State of California at the time of his death, the
issue is referred back and forth between 2 states. successional rights and intrinsic validity of the provisions in his will are to be
governed by the law of California, in accordance with which a testator has
PS GUYS SORRY HUMABA SIYA MAAM MIGHT BE SUPER SPECIFIC SA QUESTIONS
the right to dispose of his property in the way he desires, because the right of
absolute dominion over his property is sacred and inviolable.
DOCTRINE: The theory of the doctrine of renvoi is that the court of the forum,
10. Oppositor Maria Helen Christensen, through counsel, filed various motions
in determining the question before it, must take into account the whole law of the
for reconsideration, but these were denied. Hence, this appeal.
other jurisdiction, but also its rules as to conflict of laws, and then apply the law
to the actual question which the rules of the other jurisdiction prescribe. This may
be the law of the forum. ISSUE/s: W/N Philippine law should ultimately be applied? YES, PH law should
apply because the California law allows it for Californians domiciled outside the State.
RULING: WHEREFORE, the decision appealed from is hereby reversed and the case 8. There is no single American law governing the validity of testamentary
returned to the lower court with instructions that the partition be made as the Philippine provisions in the United States, each state of the Union having its own private
law on succession provides. Judgment reversed, with costs against appellees law applicable to its citizens only and in force only within the state. The
“national law” indicated in Article 16 of the Civil Code above quoted cannot,
RATIO: therefore, possibly mean or apply to any general American law. So it can refer
Edward was a US Citizen but is a domicile in the Philippines at the time of his death to no other than the private law of the State of California.
1. There is no question that Edward E. Christensen was a citizen of the United 9. Next question: what is the law in California governing the disposition of
States and of the State of California at the time of his death. But there is also personal property?
no question that at the time of his death he was domiciled in the Philippines. 10. The court below sustains the contention of Executor Aznar that under the
2. The executor admitted those facts in his appellee’s brief. California Probate Code, a testator may dispose of his property by will in the
3. In arriving at the conclusion that the domicile of the deceased is the form and manner he desires.
Philippines, SC was persuaded by the fact that he was born in New York, 11. However, Helen invokes the provisions of Article 946 of the Civil Code of
migrated to California and resided there for nine years, and since he came to California, which is as follows: If there is no law to the contrary, in the place
the Philippines in 1913 he returned to California very rarely and only for short where personal property is situated, it is deemed to follow the person of its
visits (perhaps to relatives), and considering that he appears never to have
owner, and is governed by the law of his domicile.
owned or acquired a home or properties in that state, which would indicate
12. The Court checked the California Civil Code and it is there. On the other
that he would ultimately abandon the Philippines and make home in the State
hand, what is relied upon by Executor Aznar is a case cited in the decision
of California.
4. Residence is a term used with many shades of meaning from mere temporary and testified to by a witness [only the Kaufman case is correctly cited]
presence to the most permanent abode. Generally, however, it is used to 13. Executor Aznar: as Christensen was a citizen of California, the internal law
denote something more than mere physical presence. (Sec. 16, Goodrich on should govern the determination of the will’s validity.
Conflict of Laws) 14. Helen: Article 946 should be applicable, and in accordance therewith and
5. As to his citizenship, however, SC found that the citizenship that he acquired following the doctrine of the renvoi, the question of the validity of the
in California when he resided in Sacramento, California from 1904 to 1913, testamentary provision in question should be referred back to the law of the
was never lost by his stay in the Philippines, for the latter was a territory of decedent's domicile, which is the Philippines.
the United States (not a state) until 1946 and the deceased appears to have
considered himself as a citizen of California by the fact that when he executed The theory of doctrine of Renvoi
his will in 1951 he declared that he was a citizen of that State; so that he 15. Assume (1) that this question arises in a Massachusetts court. There the rule
appears never to have intended to abandon his California citizenship by of the conflict of laws as to intestate succession to movables calls for an
acquiring another. application of the law of the deceased's last domicile. Since by hypothesis X's
last domicile was France, the natural thing for the Massachusetts court to do
Position of the Parties would be to turn to French statute of distributions, or whatever corresponds
6. The law that governs the validity of his testamentary dispositions is defined thereto in French law, and decree a distribution accordingly. An examination
in Article 16 of the Civil Code of the Philippines, which is as follows: of French law, however, would show that if a French court were called upon
ART. 16. Real property as well as personal property is subject to the law of to determine how this property should be distributed, it would refer the
the country where it is situated. However, intestate and testamentary distribution to the national law of the deceased, thus applying the
successions, both with respect to the order of succession and to the Massachusetts statute of distributions. So on the surface of things the
amount of successional rights and to the intrinsic validity of testamentary Massachusetts court has open to it alternative course of action: (a) either to
provisions, shall be regulated by the national law of the person whose apply the French law is to intestate succession, or (b) to resolve itself into a
succession is under consideration, whatever may be the nature of the French court and apply the Massachusetts statute of distributions, on the
property and regardless of the country where said property may be found. assumption that this is what a French court would do. If it accepts the so-
7. The application of this article in the case at bar requires the determination of called renvoi doctrine, it will follow the latter course, thus applying its own
the meaning of the term "national law" is used therein. law. This is one type of renvoi. A jural matter is presented which the conflict-
 of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of Article 946 of the California Civil Code is its conflict of laws rule, while
which, in turn, refers the matter back again to the law of the forum. This is the rule applied in Kaufman, is its internal law. If the law on succession
renvoi in the narrower sense. The German term for this judicial process is and the conflict of laws rules of California are to be enforced jointly, each in
'Ruckverweisung.' its own intended and appropriate sphere, the principle cited in Kaufman
16. After a decision has been arrived at that a foreign law is to be resorted to as should apply to citizens living in the State, but Article 946 should apply
governing a particular case, the further question may arise: Are the rules as to such of its citizens as are not domiciled in California but in other
to the conflict of laws contained in such foreign law also to be resorted to? jurisdictions.
This is a question which, while it has been considered by the courts in but a 21. It is argued on Executor Aznar’s behalf that the clause "if there is no law to
few instances, has been the subject of frequent discussion by textwriters and the contrary in the place where the property is situated" in Sec. 946 of the
essayists; and the doctrine involved has been descriptively designated by California Civil Code refers to Article 16 of the Civil Code of the Philippines
them as the "Renvoyer" to send back, or the "Ruchversweisung", or the and that the law to the contrary in the Philippines is the provision in said
"Weiterverweisung", since an affirmative answer to the question postulated Article 16 that the national law of the deceased should govern.
and the operation of the adoption of the foreign law in toto would in many 22. This contention can not be sustained. As explained in the various authorities
cases result in returning the main controversy to be decided according to the cited above, the national law mentioned in Article 16 of our Civil Code is the
law of the forum. law on conflict of laws in the California Civil Code, i.e., Article 946, which
17. Another theory, known as the "doctrine of renvoi", has been advanced. authorizes the reference or return of the question to the law of the testator's
The theory of the doctrine of renvoi is that the court of the forum, in domicile.
determining the question before it, must take into account the whole law 23. The conflict of laws rule in California, Article 946, Civil Code, precisely
of the other jurisdiction, but also its rules as to conflict of laws, and then refers back the case, when a decedent is not domiciled in California, to the
apply the law to the actual question which the rules of the other law of his domicile, the Philippines in the case at bar. The court of the
jurisdiction prescribe. This may be the law of the forum. domicile can not and should not refer the case back to California; such action
18. The recognition of the renvoi theory implies that the rules of the conflict of would leave the issue incapable of determination because the case will then
laws are to be understood as incorporating not only the ordinary or internal be like a football, tossed back and forth between the two states, between the
law of the foreign state or country, but its rules of the conflict of laws as country of which the decedent was a citizen and the country of his domicile.
well. According to this theory 'the law of a country' means the whole of its 24. The Philippine court must apply its own law as directed in the conflict of laws
law.50 rule of the state of the decedent, if the question has to be decided, especially
19. Von Bar’s views: as the application of the internal law of California provides no legitime for
a. Every court shall observe the law of its country as regards the application of foreign
laws. children while the Philippine law, Arts. 887(4) and 894, Civil Code of the
b. Provided that no express provision to the contrary exists, the court shall respect: Philippines, makes natural children legally acknowledged forced heirs of the
i. The provisions of a foreign law which disclaims the right to bind its parent recognizing them. The Philippine court therefore must apply its own
nationals abroad as regards their personal statute, and desires that said
personal statute shall be determined by the law of the domicile, or even
law as directed in the conflict of laws rule of the state of the decedent.
by the law of the place where the act in question occurred. 25. The Philippine cases cited by Aznar and Lucy to support the decision can not
ii. The decision of two or more foreign systems of law, provided it be certain possibly apply in the case at bar, for two important reasons, i.e., the subject
that one of them is necessarily competent, which agree in attributing the in each case does not appear to be a citizen of a state in the United States but
determination of a question to the same system of law. with domicile in the Philippines, and it does not appear in each case that there
exists in the state of which the subject is a citizen, a law similar to or identical
Pursuant to the Renvoi doctrine, PH laws should govern with Art. 946 of the California Civil Code.
20. The laws of California have prescribed two sets of laws for its citizens, one
for residents therein and another for those domiciled in other jurisdictions.

50
This is from an article in the Yale Law Journal. This was the example given: If, for example, the English personal property upon death in accordance with the law of domicile, and if he finds that the Belgian law
law directs its judge to distribute the personal estate of an Englishman who has died domiciled in Belgium would make the distribution in accordance with the law of nationality — that is the English law — he must
in accordance with the law of his domicile, he must first inquire whether the law of Belgium would distribute accept this reference back to his own law.
 003 BELLIS v. BELLIS (Gonzales) 1. Amos G. Bellis, born in Texas, was a citizen of the State of Texas, USA.
June 6, 1967 | Bengzon, J.P., J. | Renvoi By his first wife, Mary E. Mallen, whom he divorced, he had five legitimate
children: Edward, George (who pre-deceased him in infancy), Henry,
PETITIONERS: Testae Estate of Amos G. Bellis, People’s Bank & Trust Company Alexander and Anna; by his second wife, Violet Kennedy, who survived
(executor), Maria Cristina Bellis and Miriam Palma Bellis him, he had three legitimate children: Edwin, Walter and Dorothy; and
RESPONDENTS: Edward A. Bellis et al. finally, he had three illegitimate children: Amos Bellis, Jr., Maria Cristina
and Miriam Palma.
SUMMARY: Amos Bellis was a citizen of Texas, USA. He executed a will in the 2. On August 5, 1952, Amos executed a will in the Philippines, in which he
Philippines, providing that $240,000 would go to his first wife, P40,000 each to his directed that after all taxes, obligations, and expenses of administration are
three illegitimate children and the remainder will be divided equally among his seven paid for, his estate should be divided, in trust, in the following order and
children with his first and second wife. Amos died and his will was admitted to manner: (a) $240,000.00 to his first wife; (b) P120,000.00 to his three
probate. The executor People’s Bank paid $240,000 to the first wife and P40,000 illegitimate children (P40,000.00 each) and (c) the remainder shall go to
each to the illegitimate children. It also submitted a project of partition dividing the his seven surviving children by his first and second wives in equal shares.
remainder of the estate to the other seven children. The illegitimate children opposed 3. On July 8, 1958, Amos died, a resident of San Antonio, Texas. His will was
on the ground that they were deprived of legitimes. The probate court overruled their admitted to probate in the CFI Manila on September 15, 1958.
opposition and applied the Texas law, which did not provide for legitimes. The 4. The People's Bank and Trust Company, as executor of the will, paid all the
issues are (1) WoN the renvoi doctrine applies – NO. It is not disputed that the bequests therein including the amount of $240,000.00 in the form of shares
decedent was both a national of Texas and a domicile thereof at the time of his death. of stock to the first wife and to the three illegitimate children, various
So that even assuming Texas has a conflict of law rule providing that the domiciliary amounts totalling P40,000.00, or a total of P120,000.00, which it released
system (law of the domicile) should govern, the same would not result in a reference from time to time according as the lower court approved and allowed the
back (renvoi) to Philippine law, but would still refer to Texas law. (2) Which law various motions or petitions filed by the latter three requesting partial
must apply, Texas law or Philippine law – Texas law. The illegitimate children argue advances on account of their respective legacies.
that Article 17, paragraph three, of the Civil Code prevails as the exception to Art. 5. On January 8, 1964, preparatory to closing its administration, the executor
16, par. 2 of the Civil Code (According to them, the general rule is when it comes to submitted and filed its "Executor's Final Account, Report of
succession, we follow the national law of the decedent but since the Texas law does Administration and Project of Partition" wherein it reported, inter alia, the
not provide for legitimes, it would be against public policy therefore do not apply satisfaction of the legacy of the first wife by the delivery to her of shares
Texas law). The SC did not agree with them. Congress deleted the phrase, of stock amounting to $240,000.00, and the legacies of the illegitimate
"notwithstanding the provisions of this and the next preceding article" when they children in the amount of P40,000.00 each or a total of P120.000.00. In the
incorporated Art. 11 of the old Civil Code as Art. 17 of the new Civil Code, while project of partition, the executor — pursuant to the "Twelfth" clause of the
reproducing without substantial change the second paragraph of Art. 10 of the old testator's Last Will and Testament — divided the residuary estate into
Civil Code as Art. 16 in the new. As further indication of this legislative intent, seven equal portions for the benefit of the testator's seven legitimate
Congress added a new provision, under Art. 1039, which decrees that capacity to children by his first and second marriages.
succeed is to be governed by the national law of the decedent. Since the intrinsic 6. On January 17, 1964, Maria Cristina and Miriam Palma (illegitimate
validity of the provision of the will and the amount of successional rights are to be children) filed their respective oppositions to the project of partition on the
determined under Texas law, the Philippine law on legitimes cannot be applied to the ground that they were deprived of their legitimes as illegitimate children
testacy of Amos G. Bellis. and, therefore, compulsory heirs of the deceased.
7. Amos Bellis, Jr. interposed no opposition despite notice to him, proof of
DOCTRINE: It is therefore evident that whatever public policy or good customs service of which is evidenced by the registry receipt.
may be involved in our system of legitimes, Congress has not intended to extend the 8. The lower court, on April 30, 1964, issued an order overruling the
same to the succession of foreign nationals. For it has specifically chosen to oppositions and approving the executor's final account, report and
leave, inter alia, the amount of successional rights, to the decedent's national Law. administration and project of partition. Relying upon Art. 16 of the Civil
Code, it applied the national law of the decedent, which in this case is Texas
law, which did not provide for legitimes.
FACTS:
 9. Their respective motions for reconsideration having been denied by the arguments. Rather, they argue that their case falls under the circumstances
lower court on June 11, 1964, the illegitimate children appealed to this mentioned in the third paragraph of Article 17 in relation to Article 16 of
Court to raise the issue of which law must apply — Texas law or Philippine the Civil Code.
law. 5. Article 16, par. 2,51 and Art. 103952 of the Civil Code, render applicable the
national law of the decedent, in intestate or testamentary successions, with
ISSUES: regard to four items: (a) the order of succession; (b) the amount of
1. WoN the renvoi doctrine applies – NO. It is not disputed that the decedent successional rights; (c) the intrinsic validity of the provisions of the will;
was both a national of Texas and a domicile thereof at the time of his death. and (d) the capacity to succeed.
So that even assuming Texas has a conflict of law rule providing that the 6. The illegitimate children would however counter that Article 17, paragraph
domiciliary system (law of the domicile) should govern, the same would three,53 of the Civil Code prevails as the exception to Art. 16, par. 2 of the
not result in a reference back (renvoi) to Philippine law, but would still Civil Code.
refer to Texas law. 7. This is not correct. Precisely, Congress deleted the phrase,
2. Which law must apply, Texas law or Philippine law – Texas law. Since the "notwithstanding the provisions of this and the next preceding article"
intrinsic validity of the provision of the will and the amount of successional when they incorporated Art. 11 of the old Civil Code as Art. 17 of the new
rights are to be determined under Texas law, the Philippine law on Civil Code, while reproducing without substantial change the second
legitimes cannot be applied to the testacy of Amos G.Bellis. paragraph of Art. 10 of the old Civil Code as Art. 16 in the new. It must
have been their purpose to make the second paragraph of Art. 16 a specific
RULING: Order of the probate court is affirmed. provision in itself which must be applied in testate and intestate
successions. As further indication of this legislative intent, Congress added
RATIO: a new provision, under Art. 1039, which decrees that capacity to succeed
1. In this regard, the parties do not submit the case on, nor even discuss, the is to be governed by the national law of the decedent.
doctrine of renvoi, applied by this Court in Aznar vs. Christensen Garcia. 8. It is therefore evident that whatever public policy or good customs may
Said doctrine is usually pertinent where the decedent is a national of one be involved in our system of legitimes, Congress has not intended to
country, and a domicile of another. extend the same to the succession of foreign nationals. For it has
2. In the present case, it is not disputed that the decedent was both a specifically chosen to leave, inter alia, the amount of successional rights,
national of Texas and a domicile thereof at the time of his death. So to the decedent's national Law. Specific provisions must prevail over
that even assuming Texas has a conflict of law rule providing that the general ones.
domiciliary system (law of the domicile) should govern, the same 9. The illegitimate children would also point out that the decedent executed
would not result in a reference back (renvoi) to Philippine law, but two wills — one to govern his Texas estate and the other his Philippine
would still refer to Texas law. estate — arguing from this that he intended Philippine law to govern his
3. Nonetheless, if Texas has a conflict of law rule adopting the situs theory Philippine estate. Assuming that such was the decedent's intention in
(lex rei sitae) calling for the application of the law of the place where executing a separate Philippine will, it would not alter the law, for as this
the properties are situated, renvoi would arise, since the properties Court ruled in Miciano vs. Brimo, a provision in a foreigner's will to the
here involved are found in the Philippines. In the absence, however, of effect that his properties shall be distributed in accordance with
proof as to the conflict of law rule of Texas, it should not be presumed Philippine law and not with his national law, is illegal and void, for his
different from ours. national law cannot be ignored in regard to those matters that Article
4. The illegitimate children’s position is therefore not rested on the doctrine 10 — now Article 16 — of the Civil Code states said national law
of renvoi. As stated, they never invoked nor even mentioned it in their should govern.

51 52
"Art 16. Real property as well as personal property is subject to the law of the country where it is "Art. 1039. Capacity to succeed is governed by the law of the nation of the decedent."
53
situated. "Prohibitive laws concerning persons, their acts or property, and those which have for their object
"However", intestate and testamentary successions, both with respect to the order of succession and to public order, public policy and good customs shall not be rendered ineffective by laws, or judgments
the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be promulgated, or by determinations or conventions agreed upon in a foreign country."
regulated by the national law of the person whose succession is under consideration, whatever may be
the nature of the property and regardless of the country wherein said property may be found."
10. The parties admit that the decedent, Amos G. Bellis, was a citizen of the
State of Texas, U.S.A., and that under the laws of Texas, there are no forced
heirs or legitimes. Accordingly, since the intrinsic validity of the provision
of the will and the amount of successional rights are to be determined under
Texas law, the Philippine law on legitimes cannot be applied to the testacy
of Amos G.Bellis.
 004 Saudi Arabian Airlines v. CA (Buenaventura edited by Gustilo) property in controversy exceeds One hundred thousand pesos (P100,000.00)
October 8, 1998 | Quisumbing, J. | Doctrine of Qualification or, in such other cases in Metro Manila, where the demand, exclusive of the
PETITIONER: Saudi Arabian Airlines above-mentioned items exceeds Two hundred Thousand pesos (P200,000.00).
RESPONDENTS: CA and Milagros P. Morada Section 2 (b), Rule 4 of the Revised Rules of Court — the venue, Quezon City, is
SUMMARY: Petitioner SAUDIA hired private respondent MORADA as a flight appropriate:
attendant in 1988, based in Jeddah. On 1990, while on a lay-over in Jakarta, Sec. 2 Venue in Courts of First Instance. — [Now Regional Trial Court]
Indonesia, she went to party with 2 male attendants, and on the following (b) Personal actions. — All other actions may be commenced and tried where
morning in their hotel, one of the male attendants attempted to rape her. She the defendant or any of the defendants resides or may be found, or where the
was rescued by hotel attendants who heard her cry for help. The Indonesian plaintiff or any of the plaintiff resides, at the election of the plaintiff.
police arrested the 2.
MORADA returned to Jeddah, but was asked by the company to go back to Weighing the relative claims of the parties, the court a quo found it best to hear
Jakarta and help arrange the release of the 2 male attendants. MORADA did not the case in the Philippines. Had it refused to take cognizance of the case, it
cooperate when she got to Jakarta. What followed was a series of would be forcing plaintiff (private respondent now) to seek remedial action
interrogations from the Saudi Courts which she did not understand as this was elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains
in their language, Arabic. In 1993, she was surprised, upon being ordered by substantial connections. That would have caused a fundamental unfairness to
SAUDIA to go to the Saudi court, that she was being convicted of (1) adultery; her.
(2) going to a disco, dancing and listening to the music in violation of Islamic The trial court also acquired jurisdiction over the parties. MORADA through her
laws; and (3) socializing with the male crew, in contravention of Islamic act of filing, and SAUDIA by praying for the dismissal of the Amended Complaint
tradition, sentencing her to five months imprisonment and to 286 lashes. on grounds other than lack of jurisdiction.
SAUDIA denied her the assistance she requested, But because she was
wrongfully convicted, Prince of Makkah dismissed the case against her and As to the choice of applicable law, we note that choice-of-law problems seek to
allowed her to leave Saudi Arabia. Shortly before her return to Manila, she was answer two important questions:
terminated from the service by SAUDIA, without her being informed of the (1) What legal system should control a given situation where some of the
cause. significant facts occurred in two or more states; and
Morada filed a Complaint for damages against SAUDIA, and Khaled Al-Balawi its (2) to what extent should the chosen legal system regulate the situation.
country manager. Considering that the complaint in the court a quo is one involving torts, the
SAUDIA ALLEGES: Private respondent’s claim for alleged abuse of rights “connecting factor” or “point of contact” could be the place or places where
occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a the tortious conduct or lex loci actus occurred. And applying the torts principle
foreign element qualifies the instant case for the application of the law of the in a conflicts case, we find that the Philippines could be said as a situs of the
Kingdom of Saudi Arabia, by virtue of the lex loci delicti commissi rule. tort (the place where the alleged tortious conduct took place). This is because it
MORADA ALLEGES: Since her Amended Complaint is based on Articles 19 and is in the Philippines where petitioner allegedly deceived private respondent, a
21 of the Civil Code, then the instant case is properly a matter of domestic law. Filipina residing and working here.
The issue is WON the Philippine courts have jurisdiction to try the case – SC
held YES. SC disagrees with MORADA that his is purely a domestic case. DOCTRINE:
However, the court finds that the RTC of Quezon City possesses jurisdiction Before a choice can be made, it is necessary for us to determine under what
over the subject matter of the suit. Its authority to try and hear the case is category a certain set of facts or rules fall. This process is known as
provided for under Section 1 of Republic Act No. 7691, to wit: characterization, or the doctrine of qualification. It is the process of deciding
BP129 Sec. 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall exercise whether or not the facts relate to the kind of question specified in a conflicts rule.
exclusive jurisdiction: The purpose of characterization is to enable the forum to select the proper law.
(8) In all other cases in which demand, exclusive of interest, damages of
whatever kind, attorney’s fees, litigation expenses, and cots or the value of the
 In applying “State of the most significant relationship” to determine the State a certain Khalid of the SAUDIA office brought her to a Saudi court
which has the most significant relationship, the following contacts are to be where she was asked to sign a document written in Arabic.
taken into account and evaluated according to their relative importance with 7. SAUDIA summoned plaintiff to report to Jeddah once again and see
respect to the particular issue: (a) the place where the injury occurred; (b) the Miniewy for further investigation. Plaintiff did so after receiving
place where the conduct causing the injury occurred; (c) the domicile, residence, assurance from SAUDIAs Manila manager, Aslam Saleemi, that the
nationality, place of incorporation and place of business of the parties, and (d) investigation was routinary and that it posed no danger to her.
the place where the relationship, if any, between the parties is centered. 8. On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the
same court where the judge, to her astonishment and shock, rendered a
decision, translated to her in English, sentencing her to five months
imprisonment and to 286 lashes. Only then did she realize that the
Saudi court had tried her, together with Thamer and Allah, for what
FACTS: happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2)
going to a disco, dancing and listening to the music in violation of
1. On January 21, 1988 defendant SAUDIA (Saudi Arabian Airlines) Islamic laws; and (3) socializing with the male crew, in contravention
hired Morada as a Flight Attendant for its airlines based in Jeddah, of Islamic tradition.
Saudi Arabia. 9. Facing conviction, private respondent sought the help of her employer,
2. While on a lay-over in Jakarta, Indonesia, Morada went to a disco petitioner SAUDIA. Unfortunately, she was denied any assistance. She then
dance with fellow crew members Thamer Al-Gazzawi and Allah Al- asked the Philippine Embassy in Jeddah to help her while her case is on
Gazzawi, both Saudi nationals. They agreed to have breakfast together appeal.
at the room of Thamer. When they were in the room, Allah left and 10. Because she was wrongfully convicted, the Prince of Makkah dismissed the
Thamer attempted to rape Morada. Fortunately, a roomboy and several case against her and allowed her to leave Saudi Arabia. Shortly before her
security personnel heard her cries for help and rescued her. Later, the return to Manila, she was terminated from the service by SAUDIA, without
Indonesian police came and arrested Thamer and Allah Al-Gazzawi as her being informed of the cause.
an accomplice. 11. On November 23, 1993, Morada filed a Complaint for damages against
3. When she returned to Jeddah a few days later, several SAUDIA SAUDIA, and Khaled Al-Balawi (Al- Balawi), its country manager in the
officials interrogated her about the Jakarta incident. They then RTC of QC
requested her to go back to Jakarta to help arrange the release of 12. SAUDIA filed an Omnibus Motion To Dismiss which raised the following
Thamer and Allah. grounds, to wit: (1) that the Complaint states no cause of action against
4. She learned that the Indonesian authorities agreed with Saudi Arabia to Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that the
deport Thamer and Allah after two weeks of detention. Eventually, claim or demand set forth in the Complaint has been waived, abandoned or
they were again put in service by defendant SAUDIA. Morada was otherwise extinguished; and (4) that the trial court has no jurisdiction to try
then transferred to Manila the case.
5. Her superiors requested her to see Mr. Ali Meniewy, Chief Legal 13. Morada filed an Amended Complaint wherein Al-Balawi was dropped as
Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he party defendant. On August 11, 1994, Saudia filed its Manifestation and
brought her to the police station where the police took her passport and Motion to Dismiss Amended Complaint
questioned her about the Jakarta incident. Miniewy simply stood by as 14. The trial court issued an Order dated August 29, 1994 denying the Motion to
the police put pressure on her to make a statement dropping the case Dismiss Amended Complaint filed by Saudia.
against Thamer and Allah. Not until she agreed to do so did the police 15. From the Order of RTC Judge denying the Motion to Dismiss, SAUDIA filed
return her passport and allowed her to catch the afternoon flight out of an MR alleging that the trial court has no jurisdiction to hear and try the case
Jeddah. on the basis of Article 21 of the Civil Code, since the proper law applicable
6. One year and a half later in Riyadh, Saudi Arabia, a few minutes is the law of the Kingdom of Saudi Arabia.
before the departure of her flight to Manila, Morada was not allowed to 16. RTC Judge subsequently issued another Order dated February 2, 1995,
board the plane and instead ordered to take a later flight to Jeddah to denying SAUDIAs MR.
see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did,
 17. SAUDIA filed its Petition for Certiorari and Prohibition with Prayer for of individuals and associations are rarely confined to the geographic limits of
Issuance of Writ of Preliminary Injunction and/or Temporary Restraining their birth or conception.
Order with the Court of Appeals. 6. In the instant case, the foreign element consisted in the fact that private
18. Court of Appeals rendered the Decision dated April 10, 1996, now also respondent Morada is a resident Philippine national, and that petitioner
assailed. It ruled that the Philippines is an appropriate forum considering that SAUDIA is a resident foreign corporation. Also, by virtue of the employment
the Amended Complaints basis for recovery of damages is Article 21 of the of Morada with the petitioner Saudia as a flight stewardess, events did
Civil Code, and thus, clearly within the jurisdiction of respondent Court. It transpire during her many occasions of travel across national borders,
further held that certiorari is not the proper remedy in a denial of a Motion particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa,
to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in that caused a conflicts situation to arise.
case of an adverse ruling, find recourse in an appeal. 7. We thus find Morada’s assertion that the case is purely domestic,
ISSUES: imprecise. A conflicts problem presents itself here, and the question of
3. WoN the RTC of QC has jurisdiction to hear and try civil case. – YES, rules jurisdiction confronts the court a quo.
of court provides plaintiff can elect the venue, also SAUDIA voluntarily 8. After a careful study of Morada’s Amended Complaint, and the Comment
submitted to the jurisdiction of the RTC because of filing motions to dismiss thereon, we note that she aptly predicated her cause of action on Articles 19
other than lack of jurisdiction. and 21 of the New Civil Code.
4. WoN CA erred in ruling that Philippine law should govern. – NO, the 9. Thus, in Philippine National Bank (PNB) vs. Court of Appeals, his Court held
basis of the damages suit was Article 19 and 21 of the Civil Code that: The provisions on human relations were intended to expand the concept
of torts in this jurisdiction by granting adequate legal remedy for the untold
RULING: WHEREFORE, the instant petition for certiorari is hereby number of moral wrongs which is impossible for human foresight to
DISMISSED. Civil Case No. Q-93-18394 entitled Milagros P. Morada vs. Saudi specifically provide in the statutes.
Arabia Airlines is hereby REMANDED to Regional Trial Court of Quezon City, 10. We find that the Regional Trial Court (RTC) of Quezon City possesses
Branch 89 for further proceedings. SO ORDERED. jurisdiction over the subject matter of the suit. Its authority to try and hear the
case is provided for under Section 1 of Republic Act No. 7691, to wit:
11. Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known
RATIO: as the Judiciary Reorganization Act of 1980, is hereby amended to
read as follows:
1. Petitioner SAUDIA claims that before us is a conflict of laws that must 12. SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall exercise
be settled at the outset. It maintains that private respondents claim for exclusive jurisdiction:
alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It 13. (8) In all other cases in which demand, exclusive of interest, damages of
alleges that the existence of a foreign element qualifies the instant case whatever kind, attorneys fees, litigation expenses, and costs or the value of
for the application of the law of the Kingdom of Saudi Arabia, by virtue the property in controversy exceeds One hundred thousand pesos
of the lex loci delicti commissi rule. (P100,000.00) or, in such other cases in Metro Manila, where the demand,
2. On the other hand, Morada contends that since her Amended Complaint is exclusive of the above-mentioned items exceeds Two hundred Thousand
based on Articles 19 and 21 of the Civil Code, then the instant case is properly pesos (P200,000.00).
a matter of domestic law. 14. And following Section 2 (b), Rule 4 of the Revised Rules of Courtthe venue,
3. Under the factual antecedents obtaining in this case, there is no dispute that Quezon City, is appropriate:
the interplay of events occurred in two states, the Philippines and Saudi SEC. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
Arabia. (b) Personal actions. All other actions may be commenced and tried
4. Where the factual antecedents satisfactorily establish the existence of a where the defendant or any of the defendants resides or may be
foreign element, we agree with SAUDIA that the problem herein could found, or where the plaintiff or any of the plaintiff resides, at the
present a conflicts case. election of the plaintiff.
5. A factual situation that cuts across territorial lines and is affected by the 15. Weighing the relative claims of the parties, the court a quo found it best
diverse laws of two or more states is said to contain a foreign element. The to hear the case in the Philippines. Had it refused to take cognizance of
presence of a foreign element is inevitable since social and economic affairs the case, it would be forcing plaintiff (Morada) to seek remedial action
 elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer (2) the seat of a legal or juridical person, such as a corporation;
maintains substantial connections. That would have caused a (3) the situs of a thing, that is, the place where a thing is, or is
fundamental unfairness to her. deemed to be situated. In particular, the lex situs is decisive
16. Similarly, the trial court also possesses jurisdiction over the persons of the when real rights are involved;
parties herein. By filing her Complaint and Amended Complaint with the trial (4) the place where an act has been done, the locus actus,
court, private respondent has voluntary submitted herself to the jurisdiction such as the place where a contract has been made, a
of the court. marriage celebrated, a will signed or a tort
17. The records show that petitioner SAUDIA has filed several motions praying committed. The lex loci actus is particularly important in
for the dismissal of Moradas Amended Complaint. SAUDIA also filed an contracts and torts;
Answer In Ex Abundante Cautelam dated February 20, 1995. Undeniably, (5) the place where an act is intended to come into effect, e.g.,
petitioner SAUDIA has effectively submitted to the trial courts jurisdiction the place of performance of contractual duties, or the place
by praying for the dismissal of the Amended Complaint on grounds other where a power of attorney is to be exercised;
than lack of jurisdiction. (6) the intention of the contracting parties as to the law that
18. Clearly, SAUDIA had submitted to the jurisdiction of the Regional Trial should govern their agreement, the lex loci intentionis;
Court of Quezon City. Thus, we find that the trial court has jurisdiction over (7) the place where judicial or administrative proceedings are
the case and that its exercise thereof, justified. instituted or done. The lex forithe law of the forumis
19. As to the choice of applicable law, we note that choice-of-law problems particularly important because, as we have seen earlier,
seek to answer two important questions: (1) What legal system should matters of procedure not going to the substance of the claim
control a given situation where some of the significant facts occurred in involved are governed by it; and because the lex fori applies
two or more states; and (2) to what extent should the chosen legal system whenever the content of the otherwise applicable foreign law
regulate the situation. is excluded from application in a given case for the reason
20. Several theories have been propounded in order to identify the legal system that it falls under one of the exceptions to the applications of
that should ultimately control. Although ideally, all choice-of-law theories foreign law; and
should intrinsically advance both notions of justice and predictability, they (8) the flag of a ship, which in many cases is decisive of
do not always do so. The forum is then faced with the problem of deciding practically all legal relationships of the ship and of its master
which of these two important values should be stressed. or owner as such. It also covers contractual relationships
21. Before a choice can be made, it is necessary for us to determine under particularly contracts of affreightment.
what category a certain set of facts or rules fall. This process is known as 24. Considering that the complaint in the court a quo is one involving torts, the
characterization, or the doctrine of qualification. It is the process of connecting factor or point of contact could be the place or places where the
deciding whether or not the facts relate to the kind of question specified tortious conduct or lex loci actus occurred. And applying the torts principle
in a conflicts rule. The purpose of characterization is to enable the forum in a conflicts case, we find that the Philippines could be said as a situs of the
to select the proper law. tort (the place where the alleged tortious conduct took place).This is because
22. Our starting point of analysis here is not a legal relation, but a factual it is in the Philippines where petitioner allegedly deceived private respondent,
situation, event, or operative fact. An essential element of conflict rules is a Filipina residing and working here. According to her, she had honestly
the indication of a test or connecting factor or point of contact. Choice- believed that petitioner would, in the exercise of its rights and in the
of-law rules invariably consist of a factual relationship (such as property performance of its duties, act with justice, give her her due and observe
right, contract claim) and a connecting factor or point of contact, such honesty and good faith. Instead, SAUDIA failed to protect her.
as the situs of the res, the place of celebration, the place of performance, 25. Moreover, with the widespread criticism of the traditional rule of lex loci
or the place of wrongdoing. delicti commissi, modern theories and rules on tort liability have been
23. Note that one or more circumstances may be present to serve as the possible advanced to offer fresh judicial approaches to arrive at just results. In
test for the determination of the applicable law. These test factors or points keeping abreast with the modern theories on tort liability, we find here
of contact or connecting factors could be any of the following: an occasion to apply the State of the most significant relationship rule,
(1) The nationality of a person, his domicile, his residence, his which in our view should be appropriate to apply now, given the factual
place of sojourn, or his origin; context of this case.
26. In applying “State of the most significant relationship” to determine the State
which has the most significant relationship, the following contacts are to
be taken into account and evaluated according to their relative
importance with respect to the particular issue: (a) the place where the
injury occurred; (b) the place where the conduct causing the injury
occurred; (c) the domicile, residence, nationality, place of incorporation
and place of business of the parties, and (d) the place where the
relationship, if any, between the parties is centered.
27. As already discussed, there is basis for the claim that over-all injury
occurred and lodged in the Philippines. There is likewise no question
that private respondent is a resident Filipina national, working with
petitioner, a resident foreign corporation engaged here in the business of
international air carriage. Thus, the relationship between the parties was
centered here, although it should be stressed that this suit is not based on
mere labor law violations. From the record, the claim that the
Philippines has the most significant contact with the matter in this
dispute, raised by private respondent as plaintiff below against
defendant (herein petitioner), in our view, has been properly established.
 005 LLORENTE v. COURT OF APPEALS (APASAN ed. hilario) First, there is no such thing as one American law. The "national law" indicated
November, 23, 2000 | Pardo, J. | Nature of Conflicts Rules, the Problem of
in Article 16 of the Civil Code cannot possibly apply to general American
Characterization, and Renvoi
NOTE: THIS IS THE EXACT SAME DIGEST AS JOSEPH’S SINCE HE COVERED MY ISSUE law. There is no such law governing the validity of testamentary provisions in the
AS WELL, SO I JUST EDITED SUMMARY BOX AND BOLDED OTHER THINGS RELEVANT United States. Each State of the union has its own law applicable to its citizens
TO MY ISSUE J Up to you if you wanna print both but you can just print my summary box hehe.
and in force only within the State. It can therefore refer to no other than the
PETITIONER: Paula T. Llorente law of the State of which the decedent was a resident (New York).
RESPONDENTS: Court of Appeals and Alicia F. Llorente Second, there is no showing that the application of the renvoi doctrine is called
for or required by New York State law.
SUMMARY: This case is about the will of Lorenzo, enlisted serviceman of the
US Navy from 1927 to 1957. In 1937, Lorenzo married Paula Llorente (Paula) in
Canarines Sur. After they got married, he left again for the US and left Paula here. DOCTRINE:
In 1943 he was allowed to return to the Philippines, unfortunately upon his arrival The Renvoi Doctrine shall apply only when there is a law of another state
he found out that his wife was having an adulterous relationship with his brother providing for such application.
(gross). So he flew back to the US and he was able to get a divorce decree.
Lorenzo returned to the PH and had his second marriage with Alicia Llorente.
Lorenzo executed a last will and testament where he bequeathed all his properties
to Alicia and their three children (Raul, Luz, Beverly). Then, Lorenzo filed a
petition for probate. At first it was denied by the court since he was still alive but FACTS:
the court changed its mind and admitted the probate in view of the due execution 1. The deceased Lorenzo N. Llorente (Lorenzo) was an enlisted serviceman of
of the will. Lorenzo died in 1957 pending the proceedings. On September 4, 1985, the United States Navy from March 10, 1927 to September 30, 1957.
Paula (1st wife) filed with the same court a petition for letters of administration 2. 1ST MARRIAGE: On February 22, 1937, Lorenzo and petitioner Paula
over Lorenzos estate in her favor. Paula contended (1) that she was Lorenzos
Llorente (Paula) were married before a parish priest, Roman Catholic Church,
surviving spouse, (2) that the various property were acquired during their
marriage, (3) that Lorenzos will disposed of all his property in favor of Alicia and in Nabua, Camarines Sur.
her children, encroaching on her legitime and 1/2 share in the conjugal property. 3. Before the outbreak of the Pacific War, Lorenzo departed for the United
On December 13, 1985, Alicia (2nd wife) filed in the testate proceeding, a petition States and Paula stayed in the conjugal home in barrio Antipolo, Nabua,
for the issuance of letters testamentary. On October 14, 1985, without terminating Camarines Sur.
the testate proceedings, the trial court granted the petition of Paula ruling that the 4. ACQUISITION OF US CITIZENSHIP: On November 30, 1943, Lorenzo
divorce decree was valid and therefore the 2nd marriage with Alicia was void. was admitted to United States citizenship and Certificate of
Corollary, the intrinsic disposition in the will is also void. This was affirmed with
Naturalization No. 5579816 was issued in his favor by the United States
modification ruling that Alicia is entitled as co-owner of whatever properties she
and Lorenzo had acquired during the 25 year period of their cohabitation. Hence, District Court, Southern District of New York.
this petition. 5. Upon the liberation of the Philippines by the American Forces in 1945,
Lorenzo was granted an accrued leave by the U. S. Navy, to visit his wife and
Issue No.1: WoN the Philippine Law is applicable – No. The fact that the late he visited the Philippines. He discovered that his wife Paula was pregnant
Lorenzo became an American citizen long before and at the time of: (1) his and was living in and having an adulterous relationship with his brother,
divorce from Paula; (2) marriage to Alicia; (3) execution of his will; and (4) death, Ceferino Llorente.
is duly established, admitted and undisputed. Therefore, the nationality law of the a. On December 4, 1945, Paula gave birth to a boy registered in the
decedent must be followed. The trial court and CA erred in applying the Office of the Registrar of Nabua as Crisologo Llorente, with the
Renvoi doctrine by ruling that American law follows the domiciliary theory certificate stating that the child was not legitimate and the line for
hence, Philippine law applies when determining the validity of Lorenzos will. the fathers name was left blank.
6. Lorenzo refused to forgive Paula and live with her. In fact, on February 2,
 1946, the couple drew a written agreement to the effect that (1) all the family testator Lorenzo was still alive.
allowances allotted by the United States Navy as part of Lorenzo’s salary and 14. On January 24, 1984, finding that the will was duly executed, the trial court
all other obligations for Paula’s daily maintenance and support would be admitted the will to probate.
suspended; (2) they would dissolve their marital union in accordance with 15. On June 11, 1985, before the proceedings could be terminated, Lorenzo died.
judicial proceedings; (3) they would make a separate agreement regarding 16. On September 4, 1985, Paula (1st wife) filed with the same court a petition
their conjugal property acquired during their marital life; and (4) Lorenzo for letters of administration over Lorenzos estate in her favor. Paula
would not prosecute Paula for her adulterous act since she voluntarily contended (1) that she was Lorenzos surviving spouse, (2) that the various
admitted her fault and agreed to separate from Lorenzo peacefully. The property were acquired during their marriage, (3) that Lorenzos will disposed
agreement was signed by both Lorenzo and Paula and was witnessed by of all his property in favor of Alicia and her children, encroaching on her
Paula’s father and stepmother. The agreement was notarized by Notary legitime and 1/2 share in the conjugal property.
Public Pedro Osabel. 17. On December 13, 1985, Alicia (2nd wife) filed in the testate proceeding (Sp.
7. DIVORCE DECREE: Lorenzo returned to the United States and on Proc. No. IR-755), a petition for the issuance of letters testamentary.
November 16, 1951 filed for divorce with the Superior Court of the State of 18. On October 14, 1985, without terminating the testate proceedings, the trial
California in and for the County of San Diego. Paula was represented by court gave due course to Paula’s petition in Sp. Proc. No. IR-888.
counsel, John Riley, and actively participated in the proceedings. On a. The order was published in the newspaper Bicol Star.
November 27, 1951, the Superior Court of the State of California, for the 19. On May 18, 1987, the Regional Trial Court issued a joint decision, thus:
County of San Diego found all factual allegations to be true and issued an Wherefore, considering that this court has so found that the divorce decree granted to the
late Lorenzo Llorente is void and inapplicable in the Philippines, therefore the marriage
interlocutory judgment of divorce.
he contracted with Alicia Fortunato on January 16, 1958 at Manila is likewise void. This
a. On December 4, 1952, the divorce decree became final. being so the petition of Alicia F. Llorente for the issuance of letters testamentary is
8. In the meantime, Lorenzo returned to the Philippines. denied. Likewise, she is not entitled to receive any share from the estate even if the will
9. 2ND MARRIAGE: On January 16, 1958, Lorenzo married Alicia F. Llorente especially said so her relationship with Lorenzo having gained the status of paramour which is
under Art. 739 (1).
(Alicia) in Manila. Apparently, Alicia had no knowledge of the first marriage
even if they resided in the same town as Paula, who did not oppose the On the other hand, the court finds the petition of Paula Titular Llorente, meritorious, and so
marriage or cohabitation. declares the intrinsic disposition of the will of Lorenzo Llorente dated March 13, 1981 as void
10. From 1958 to 1985, Lorenzo and Alicia lived together as husband and wife. and declares her entitled as conjugal partner and entitled to one-half of their conjugal properties,
and as primary compulsory heir, Paula T. Llorente is also entitled to one-third of the estate and
Their twenty-five (25) year union produced three children, Raul, Luz and
then one-third should go to the illegitimate children, Raul, Luz and Beverly, all surname (sic)
Beverly, all surnamed Llorente. Llorente, for them to partition in equal shares and also entitled to the remaining free portion in
11. EXECUTION OF LAST WILL: On March 13, 1981, Lorenzo executed a equal shares.
Last Will and Testament. The will was notarized by Notary Public Salvador
Petitioner, Paula Llorente is appointed legal administrator of the estate of the deceased, Lorenzo
M. Occiano, duly signed by Lorenzo with attesting witnesses Francisco Llorente. As such let the corresponding letters of administration issue in her favor upon her filing
Hugo, Francisco Neibres and Tito Trajano. In the will, Lorenzo bequeathed a bond in the amount (sic) of P100,000.00 conditioned for her to make a return to the court within
all his property to Alicia and their three children (see end of digest for specific three (3) months a true and complete inventory of all goods, chattels, rights, and credits, and
designations). estate which shall at any time come to her possession or to the possession of any other person
for her, and from the proceeds to pay and discharge all debts, legacies and charges on the same,
12. PETITION FOR PROBATE: On December 14, 1983, Lorenzo filed with or such dividends thereon as shall be decreed or required by this court; to render a true and just
the Regional Trial Court, Iriga, Camarines Sur, a petition for the probate and account of her administration to the court within one (1) year, and at any other time when
allowance of his last will and testament wherein Lorenzo moved that Alicia required by the court and to perform all orders of this court by her to be performed.
be appointed Special Administratrix of his estate.
13. On January 18, 1984, the trial court denied the motion for the reason that the 20. In time, Alicia filed with the trial court a motion for reconsideration of the
 aforequoted decision. The trial court denied Alicias motion for at the time of: (1) his divorce from Paula; (2) marriage to Alicia; (3)
reconsideration but modified the earlier decision, stating that Raul and Luz execution of his will; and (4) death, is duly established, admitted and
Llorente are not legitimate children or otherwise of Lorenzo since they were undisputed.
2. Thus, as a rule, issues arising from these incidents are necessarily governed
not legally adopted by him. Amending its decision of May 18, 1987, the trial
by foreign law. The Civil Code clearly provides:
court declared Beverly Llorente as the only illegitimate child of Lorenzo, Art. 15. Laws relating to family rights and duties, or to the status, condition and legal capacity
entitling her to one-third (1/3) of the estate and one-third (1/3) of the free of persons are binding upon citizens of the Philippines, even though living abroad.
portion of the estate. Art. 16. Real property as well as personal property is subject to the law of the country where it
is situated.
21. On September 28, 1987, Alicia appealed to the Court of Appeals. On July 31,
However, intestate and testamentary succession, both with respect to the order of succession and
1995, the Court of Appeals promulgated its decision, affirming with to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall
modification the decision of the trial court in this wise: be regulated by the national law of the person whose succession is under consideration,
WHEREFORE, the decision appealed from is hereby AFFIRMED with the MODIFICATION whatever may be the nature of the property and regardless of the country wherein said property
that Alicia is declared as co-owner of whatever properties she and the deceased may have may be found.
acquired during the twenty-five (25) years of cohabitation. 3. True, foreign laws do not prove themselves in our jurisdiction and our
courts are not authorized to take judicial notice of them. Like any other
22. MR was denied. Hence this petition. fact, they must be alleged and proved.
4. While the substance of the foreign law was pleaded, the Court of Appeals did
ISSUE:
not admit the foreign law. The Court of Appeals and the trial court called
1. WoN the Philippines Law is applicable – No, Lorenzo was already an
American Citizen when all the factual and legal circumstances in this case to the fore the renvoi doctrine, where the case was referred back to the
was brought before the court. law of the decedents domicile, in this case, Philippine law.
2. WoN the Divorce Decree is valid – Yes, being an Alien, Lorenzo validly 5. We note that while the trial court stated that the law of New York was not
obtained a divorce decree in accordance with the law of his nationality. sufficiently proven, in the same breath it made the categorical, albeit equally
3. WoN the will is valid – Extrinsically, yes, and in fact it was duly probated. unproven statement that American law follows the domiciliary theory hence,
But for the intrinsic validity, it must still be pleaded and proved in accordance
Philippine law applies when determining the validity of Lorenzos will.
with the foreign law of the decedent and therefore a remand is proper.
6. First, there is no such thing as one American law. The "national law"
RULING: The petition is GRANTED. The decision of the Court of Appeals is SET indicated in Article 16 of the Civil Code cannot possibly apply to general
ASIDE. In lieu thereof, the Court REVERSES the decision of the Regional Trial Court American law. There is no such law governing the validity of testamentary
and RECOGNIZES as VALID the decree of divorce granted in favor of the provisions in the United States. Each State of the union has its own law
deceased Lorenzo N. Llorente by the Superior Court of the State of California in and applicable to its citizens and in force only within the State. It can
for the County of San Diego, made final on December 4, 1952. Further, the Court therefore refer to no other than the law of the State of which the decedent
REMANDS the cases to the court of origin for determination of the intrinsic was a resident (New York).
validity of Lorenzo N. Llorentes will and determination of the parties successional 7. Second, there is no showing that the application of the renvoi doctrine is
rights allowing proof of foreign law with instructions that the trial court shall proceed called for or required by New York State law. The trial court held that the
with all deliberate dispatch to settle the estate of the deceased within the framework will was intrinsically invalid since it contained dispositions in favor of Alice,
of the Rules of Court. who in the trial courts opinion was a mere paramour. The trial court threw
the will out, leaving Alice, and her two children, Raul and Luz, with nothing.
RATIO: 8. The Court of Appeals also disregarded the will. It declared Alice entitled to
one half (1/2) of whatever property she and Lorenzo acquired during their
The Applicable Law cohabitation, applying Article 144 of the Civil Code of the Philippines.
1. The fact that the late Lorenzo became an American citizen long before and 9. The hasty application of Philippine law and the complete disregard of the
 will, already probated as duly executed in accordance with the to frustrate his wishes, since he was a foreigner, not covered by our laws
formalities of Philippine law, is fatal, especially in light of the factual and on family rights and duties, status, condition and legal capacity.
legal circumstances here obtaining. 16. Whether the will is intrinsically valid and who shall inherit from Lorenzo
are issues best proved by foreign law which must be pleaded and
Validity of Foreign Divorce Decree proved. Whether the will was executed in accordance with the
formalities required is answered by referring to Philippine law. In fact,
10. In Van Dorn v. Romillo, Jr. we held that owing to the nationality principle the will was duly probated.
embodied in Article 15 of the Civil Code, only Philippine nationals are 17. As a guide however, the trial court should note that whatever public
covered by the policy against absolute divorces, the same being considered policy or good customs may be involved in our system of legitimes,
contrary to our concept of public policy and morality. In the same case, the
Congress did not intend to extend the same to the succession of foreign
Court ruled that aliens may obtain divorces abroad, provided they are
nationals. Congress specifically left the amount of successional rights to
valid according to their national law. the decedent's national law.
11. Citing this landmark case, the Court held in Quita v. Court of Appeals, that
once proven that respondent was no longer a Filipino citizen when he (1) I give and bequeath to my wife ALICIA R. FORTUNO exclusively my residential house and lot, located
obtained the divorce from petitioner, the ruling in Van Dorn would become at San Francisco, Nabua, Camarines Sur, Philippines, including ALL the personal properties and other
movables or belongings that may be found or existing therein;
applicable and petitioner could very well lose her right to inherit from him.
12. In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the (2) I give and bequeath exclusively to my wife Alicia R. Fortuno and to my children, Raul F. Llorente, Luz
respondent (alien) in his country, the Federal Republic of Germany. There, F. Llorente and Beverly F. Llorente, in equal shares, all my real properties whatsoever and wheresoever
we stated that divorce and its legal effects may be recognized in the located, specifically my real properties located at Barangay Aro-Aldao, Nabua, Camarines Sur; Barangay
Paloyon, Nabua, Camarines Sur; Barangay Baras, Sitio Puga, Nabua, Camarines Sur; and Barangay
Philippines insofar as respondent is concerned in view of the nationality Paloyon, Sitio Nalilidong, Nabua, Camarines Sur;
principle in our civil law on the status of persons.
13. For failing to apply these doctrines, the decision of the Court of Appeals must (3) I likewise give and bequeath exclusively unto my wife Alicia R. Fortuno and unto my children, Raul F.
be reversed. We hold that the divorce obtained by Lorenzo H. Llorente Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, my real properties located in Quezon
City Philippines, and covered by Transfer Certificate of Title No. 188652; and my lands in Antipolo, Rizal,
from his first wife Paula was valid and recognized in this jurisdiction as Philippines, covered by Transfer Certificate of Title Nos. 124196 and 165188, both of the Registry of Deeds
a matter of comity. Now, the effects of this divorce (as to the succession to of the province of Rizal, Philippines;
the estate of the decedent) are matters best left to the determination of the
(4) That their respective shares in the above-mentioned properties, whether real or personal properties, shall
trial court.
not be disposed of, ceded, sold and conveyed to any other persons, but could only be sold, ceded, conveyed
and disposed of by and among themselves;
Validity of the Will
(5) I designate my wife ALICIA R. FORTUNO to be the sole executor of this my Last Will and Testament,
14. The Civil Code provides: and in her default or incapacity of the latter to act, any of my children in the order of age, if of age;

Art. 17. The forms and solemnities of contracts, wills, and other public instruments shall be
(6) I hereby direct that the executor named herein or her lawful substitute should served (sic) without bond;
governed by the laws of the country in which they are executed.
(7) I hereby revoke any and all my other wills, codicils, or testamentary dispositions heretofore executed,
When the acts referred to are executed before the diplomatic or consular officials of the Republic
signed, or published, by me;
of the Philippines in a foreign country, the solemnities established by Philippine laws shall be
observed in their execution.
(8) It is my final wish and desire that if I die, no relatives of mine in any degree in the Llorentes Side should
ever bother and disturb in any manner whatsoever my wife Alicia R. Fortunato and my children with respect
15. The clear intent of Lorenzo to bequeath his property to his second wife and to any real or personal properties I gave and bequeathed respectively to each one of them by virtue of this
children by her is glaringly shown in the will he executed. We do not wish Last Will and Testament.
 006 LAUREL VS GARCIA (HIRANG) [PLEASE SEE FACTS 9-10 FOR FULL ARGUMENT OF LAUREL.]
25 July 1990 |Gutierrez, J. | Property Respondents aver that the subject property is not governed by our Civil Code but by
the laws of Japan and that the Roppongi property has ceased to become property of
PETITIONER: SALVADOR H. LAUREL (Petitioner for GR 92013), DIONISIO public dominion. [PLEASE SEE FACTS 11-12 FOR FULL ARGUMENT OF
S. OJEDA (Petitioner for GR 92047) RESPODENTS] The issue in this case is WoN the Roppongi and its related
properties can be sold by the Executive and the court ruled in the negative. The court
RESPONDENTS: RAMON GARCIA, as head of the Asset Privatization Trust, stated that the nature of the Roppongi lot as property for public service is expressly
RAUL MANGLAPUS, as Secretary of Foreign Affairs, and CATALINO spelled out. It is a property of public dominion as correctly classified under the 2nd
paragraph of Article 420 of the Civil Code. As a property of public dominion, such is
MACARAIG, as Executive Secretary, respondents. (Respondents for GR 92013),
outside the commerce of man and thus cannot be appropriated unless it is clearly
EXECUTIVE SECRETARY MACARAIG, JR., ASSETS PRIVATIZATION shown that such property has become patrimonial. In this case, the Respondents failed
TRUST CHAIRMAN RAMON T. GARCIA, AMBASSADOR RAMON DEL to do this. The mere fact that the Roppongi site has not been used for a long time for
ROSARIO, et al., as members of the PRINCIPAL AND BIDDING COMMITTEES actual Embassy service does not automatically convert it to patrimonial property. Any
ON THE UTILIZATION/DISPOSITION PETITION OF PHILIPPINE such conversion happens only if the property is withdrawn from public use. A
GOVERNMENT PROPERTIES IN JAPAN (Respondents for GR 92047) property continues to be part of the public domain, not available for private
appropriation or ownership until there is a formal declaration on the part of the
SUMMARY: This case involves one of the four properties the Phippine acquired government to withdraw it from being such. Moreover, the rule of lex situs does not
from Japan under the Reparations Agreement, namely the Roppongi Property. It was apply in this case since there is no issue with regard to any Conflict of Law [PLEASE
procured from the Japanese Government as an indemnification to the Filipino people SEE RATIO 8-10]. Lastly, the Executive cannot convey properties under the name
for their losses in life and property and their suffering during World War II. The of the Republic of the Philippines unless such conveyance is executed by the
Roppongi property was acquired under the heading "Government Sector” for the President of the Philippines together with a law authorizing to do so in accordance
Chancery of the Philippine Embassy". As intended, it became the site of the with the Administrative Code. In this case, there is no such law authorizing such
Philippine Embassy until the latter was transferred to Nampeidai on July 22, 1976 conveyance.
when the Roppongi building needed major repairs. Due to the failure of our [NOTE PLEASE READ WHOLE RATIO: EVERY SINGLE POINT IS
government to provide necessary funds, the Roppongi property has remained IMPORTANT TOO LONG TO BE INCLUDED IN THE SUMMARY BOX]
undeveloped since that time. As intended, it became the site of the Philippine DOCTRINE: Properties of public dominion is outside the commerce of man. It
Embassy until the latter was transferred to Nampeidai on July 22, 1976 when the cannot be alienated. Its ownership is a special collective ownership for general use
Roppongi building needed major repairs. Due to the failure of our government to and enjoyment, an application to the satisfaction of collective needs, and resides in
provide necessary funds, the Roppongi property has remained undeveloped since that the social group. The purpose is not to serve the State as a juridical person, but the
time. A proposal to lease the premises to a Japanese Corporation was present but the citizens; it is intended for the common and public welfare and cannot be the object of
government did not act favorably to this. Subsequently, President Corazon Aquino appropration
issued Executive Order No. 296 entitling non-Filipino citizens or entities to avail of
separations' capital goods and services in the event of sale, lease or disposition. The FACTS:
four properties in Japan including the Roppongi were specifically mentioned in the
first "Whereas" clause. Petitioner Laurel asserts that the Roppongi property and the 1. This case is a consolidation of 2 cases namely G.R. No. 92013 and G.R. No.
related lots were acquired as part of the reparations from the Japanese government 92047 (GR 92013 is the focus of our topic)
for diplomatic and consular use by the Philippine government. He states that the 2. The subject property in this case is one (Roppongi Property) of the four (4)
Roppongi property is classified as one of public dominion, and not of private properties 54 in Japan acquired by the Philippine government under the
ownership under Article 420 of the Civil Code. He states that being one of public Reparations Agreement entered into with Japan on May 9, 1956
dominion, no ownership by any one can attach to it, not even by the STATE

54
The Nampeidai Property, The Kobe Commercial Property, The Kobe Residential Property
and Roppongi Property
3. The properties and the capital goods and services procured from the Japanese improvements". The petitioner states that they continue to be intended
government for national development projects are part of the indemnification for a necessary service. They are held by the State in anticipation of an
to the Filipino people for their losses in life and property and their suffering opportune use. Hence, it cannot be appropriated, since it is outside the
during World War II. commerce of man, or to put it in more simple terms, it cannot be
4. The Roppongi property was acquired from the Japanese government under alienated nor be the subject matter of contracts. Noting the non-use of
the Second Year Schedule and listed under the heading "Government the Roppongi property at the moment, the petitioner avers that the same
Sector", through Reparations Contract No. 300 dated June 27, 1958. The remains property of public dominion so long as the government has not
Roppongi property consists of the land and building "for the Chancery used it for other purposes nor adopted any measure constituting a
of the Philippine Embassy" removal of its original purpose or use.
5. As intended, it became the site of the Philippine Embassy until the latter 11. The respondents refute the Laurel's contention by saying that the subject
was transferred to Nampeidai on July 22, 1976 when the Roppongi property is not governed by our Civil Code but by the laws of Japan
building needed major repairs. Due to the failure of our government to where the property is located. They rely upon the rule of lex situs which
provide necessary funds, the Roppongi property has remained is used in determining the applicable law regarding the acquisition,
undeveloped since that time. transfer and devolution of the title to a property. They also invoke
6. A proposal was presented to President Corazon C. Aquino by former Opinion No. 21, Series of 1988, dated January 27, 1988 of the Secretary of
Philippine Ambassador to Japan, Carlos J. Valdez, to make the property the Justice which used the lex situs in explaining the inapplicability of Philippine
subject of a lease agreement with a Japanese firm - Kajima Corporation law regarding a property situated in Japan.
wherein it shall construct two (2) buildings in Roppongi and one (1) building 12. The respondents add that even assuming for the sake of argument that
in Nampeidai and renovate the present Philippine Chancery in Nampeidai. At the Civil Code is applicable, the Roppongi property has ceased to become
the end of the lease period, all the three leased buildings shall be occupied property of public dominion. It has become patrimonial property
and used by the Philippine government. No change of ownership or title shall because it has not been used for public service or for diplomatic purposes
occur. The Philippine government retains the title all throughout the lease for over thirteen (13) years now and because the intention by the
period and thereafter. However, the government has not acted favorably on Executive Department and the Congress to convert it to private use has
this proposal which is pending approval and ratification between the parties been manifested by overt acts, such as, among others: (1) the transfer of
7. After the failure of the proposed leased agreement to materialize, the the Philippine Embassy to Nampeidai (2) the issuance of administrative
President issued Executive Order No. 296 entitling non-Filipino citizens orders for the possibility of alienating the four government properties in
or entities to avail of separations' capital goods and services in the event Japan; (3) the issuance of Executive Order No. 296; (4) the enactment by the
of sale, lease or disposition. The four properties in Japan including the Congress of Rep. Act No. 6657 [the Comprehensive Agrarian Reform Law]
Roppongi were specifically mentioned in the first "Whereas" clause. on June 10, 1988 which contains a provision stating that funds may be taken
8. The Executive branch of the government has been pushing, with great vigor, from the sale of Philippine properties in foreign countries; (5) the holding of
its decision to sell the reparations properties starting with the Roppongi lot. the public bidding of the Roppongi property but which failed; (6) the
The property has twice been set for bidding at a minimum floor price of $225 deferment by the Senate in Resolution No. 55 of the bidding to a future date;
million. The first bidding was a failure since only one bidder qualified. The thus an acknowledgment by the Senate of the government's intention to
second one, after postponements, has not yet materialized as it has been remove the Roppongi property from the public service purpose; and (7) the
restrained by the courts. resolution of this Court dismissing the petition in Ojeda v. Bidding
9. In GR 92013 Laurel asserts that the Roppongi property and the related Committee, et al., G.R. No. 87478 which sought to enjoin the second bidding
lots were acquired as part of the reparations from the Japanese of the Roppongi property scheduled on March 30, 1989.
government for diplomatic and consular use by the Philippine 13. In G.R. No. 94047, petitioner Ojedaasks this Court to rule on the
government. He states that the Roppongi property is classified as one of constitutionality of Executive Order No. 296. He avers that the executive
public dominion, and not of private ownership under Article 420 of the order contravenes the constitutional mandate to conserve and develop the
Civil Code. He states that being one of public dominion, no ownership by national patrimony stated in the Preamble of the 1987 Constitution [Filipino
any one can attach to it, not even by the State. First Policy]
10. The Roppongi and related properties were acquired for "sites for ISSUE/s:
chancery, diplomatic, and consular quarters, buildings and other WoN the Roppongi and its related properties can be sold by the Executive? –
 No. As a property of public dominion, the Roppongi lot is outside the Civil Code must be definite
commerce of man. It cannot be alienated. Its ownership is a special collective 6. A mere transfer of the Philippine Embassy to Nampeidai in 1976 is not
ownership for general use and enjoyment, an application to the satisfaction relinquishment of the Roppongi property's original purpose. Even the
of collective needs, and resides in the social group. The purpose is not to failure by the government to repair the building in Roppongi is not
serve the State as a juridical person, but the citizens; it is intended for the abandonment since as earlier stated, there simply was a shortage of
common and public welfare and cannot be the object of appropration government funds.
7. Executive Order No. 296, though its title declares an "authority to sell", does
RULING: WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are not have a provision in its text expressly authorizing the sale of the four
GRANTED. properties procured from Japan for the government sector. The
executive order does not declare that the properties lost their public
RATIO: character. It merely intends to make the properties available to foreigners
1. The nature of the Roppongi lot as property for public service is expressly and not to Filipinos alone in case of a sale, lease or other disposition. It
spelled out. It is dictated by the terms of the Reparations Agreement and the merely eliminates the restriction under Rep. Act No. 1789 that reparations
corresponding contract of procurement which bind both the Philippine goods may be sold only to Filipino citizens and one hundred (100%) percent
government and the Japanese government. There can be no doubt that it is Filipino-owned entities
of public dominion unless it is convincingly shown that the property has 8. The respondents try to get around the public dominion character of the
become patrimonial. This, the respondents have failed to do. Roppongi property by insisting that Japanese law and not our Civil Code
2. As a property of public dominion, the Roppongi lot is outside the should apply.
commerce of man. It cannot be alienated. Its ownership is a special 9. We see no reason why a conflict of law rule should apply when no conflict
collective ownership for general use and enjoyment, an application to the of law situation exists. A conflict of law situation arises only when: (1)
satisfaction of collective needs, and resides in the social group. The purpose There is a dispute over the title or ownership of an immovable, such that
is not to serve the State as a juridical person, but the citizens; it is the capacity to take and transfer immovables, the formalities of conveyance,
intended for the common and public welfare and cannot be the object of the essential validity and effect of the transfer, or the interpretation and effect
appropration of a conveyance, are to be determined and (2) A foreign law on land
3. The Court in deciding this case stated that the Roppongi property is ownership and its conveyance is asserted to conflict with a domestic law
correctly classified under paragraph 2 of Article 420 of the Civil Code55 as on the same matters. Hence, the need to determine which law should apply
property belonging to the State and intended for some public service. 10. In the instant case, none of the above elements exists. The issues are not
4. The fact that the Roppongi site has not been used for a long time for concerned with validity of ownership or title. There is no question that
actual Embassy service does not automatically convert it to patrimonial the property belongs to the Philippines. The issue is the authority of the
property. Any such conversion happens only if the property is respondent officials to validly dispose of property belonging to the State.
withdrawn from public use. A property continues to be part of the public And the validity of the procedures adopted to effect its sale. This is governed
domain, not available for private appropriation or ownership until there by Philippine Law. The rule of lex situs does not apply.
is a formal declaration on the part of the government to withdraw it from 11. Assuming for the sake of argument, however, that the Roppongi property is
being such no longer of public dominion, there is another obstacle to its sale by the
5. The respondents enumerate various pronouncements by concerned public respondents. There is no law authorizing its conveyance
officials insinuating a change of intention. We emphasize, however, that an 12. Under Sec 48 of the Administrative Code of 198756 not only must the
abandonment of the intention to use the Roppongi property for public conveyance of the properties in the name of the Republic of the
service and to make it patrimonial property under Article 422 of the

55 56
Art 420. The following things are property of public dominion Official Authorized to Convey Real Property. — Whenever real property of the Government
(2) Those which belong to the State, without being for public use, and are intended for some is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the
public service or for the development of the national wealth. government by the following:
(1) For property belonging to and titled in the name of the Republic of the
Philippines, by the President, unless the authority therefor is expressly vested by
law in another officer.
 Philippines be executed by the President, there must also be a law which
authorizes such conveyance.
13. Resolution No. 55 of the Senate dated June 8, 1989, asking for the deferment
of the sale of the Roppongi property does not withdraw the property from
public domain much less authorize its sale. It is a mere resolution; it is not a
formal declaration abandoning the public character of the Roppongi property.
In fact, the Senate Committee on Foreign Relations is conducting hearings
on Senate Resolution No. 734 which raises serious policy considerations and
calls for a fact-finding investigation of the circumstances behind the decision
to sell the Philippine government properties in Japan
14. With regard to the Constitutionality of Executive Order 296, the SC stated
“Having declared a need for a law or formal declaration to withdraw the
Roppongi property from public domain to make it alienable and a need for
legislative authority to allow the sale of the property, we see no compelling
reason to tackle the constitutional issues raised by petitioner Ojeda.
 07 Holy See vs. Rosario (Kat) 3. Petition arose from a controversy over a parcel of land located in the
Dec 1, 1994 | Quiason, J. | Property municipality of Parañaque. Lot 5-A, registered under the name Holy See, was
contiguous to Lot 5-B and 5-D under the name of Philippine Realty
Corporation (PRC).
PETITIONER: The Holy See
4. The land was donated by the Archdiocese of Manila to the Papal Nuncio for
RESPONDENTS: The Hon. Eriberto U. Rosario, Jr., as Presiding Judge of the
his residence.
Regional Trial Court of Makati, Branch 61 and Starbright Sales Enterprises, Inc.
5. Said lots were sold by petitioner through an agent to Ramon Licup. The
agreement to sell was made on the condition that earnest money of
SUMMARY: The petition is about a parcel of land in Paranaque, which
P100,000.00 be paid by Licup to the sellers, and that the sellers clear the said
was registered to Holy See. The land was donated to the Papal Nuncio
lots of squatters who were then occupying the same. Licup then assigned his
for his residence. The lots were sold to Ramon Licup who assigned his
rights to respondents Starbright Sales Enterprises, Inc.
rights to Starbright Sales Enterprises, Inc. However, the land was
6. However, the land was surrounded and occupied by squatters. Msgr. Cirilos
occupied by squatters. There was a dispute as to who should evict the
informed private respondent of the squatters' refusal to vacate the lots,
squatters. Msgr. Cirilios then returned the earnest money and then sold it
proposing instead either that private respondent undertake the eviction or that
to Tropicana Properties. Starbright then filed for the annulment of the sale.
the earnest money be returned to the latter.
Holy See moved to dismiss for lack of jurisdiction based on immunity from
7. Respondent Starbright Sales Enterprises Inc. insists that Holy See should be
suit. RTC denied saying that what is involved is a business contract. The
the one to clear the property of squatters because if they do it, Holy See should
issue is WoN Holy See can invoke sovereign immunity – YES. The Court held
then reduce the purchase price for the parcel of land. Holy See, on the other
that the Holy See may properly invoke sovereign immunity for its non-
hand, says that the respondent corporation should do it or the earnest money
suability. In Article 31 (A) of the 1961 Vienna Convention on Diplomatic
will be returned. With this, Msgr. Cirilios, the agent, subsequently returned
Relations, diplomatic envoy shall be granted immunity from civil and
the P100,000.00 earnest money.
administrative jurisdiction of the receiving state over any real action
8. Starbright sent the earnest money back to the sellers, but later discovered that
relating to private immovable property. Holy See is a duly accredited
on March 30, 1989, petitioner and the PRC, without notice to private
diplomatic missionary to the Republic of the Philippines and is thus
respondent, sold the lots to Tropicana.
exempted from local jurisdiction and is entitled to immunity rights of a
9. On January 23, 1990, Starbright Sales Enterprises, Inc. filed a complaint for
diplomatic mission or embassy in this Court. While the said lot was
annulment of the sale of the three parcels of land, and specific performance
acquired and bought in the ordinary cause of real estate business, its
and damages against petitioner. It alleges that it is willing and able to comply
acquisition and disposal were not made for profit but claimed that it
with the terms of the contract to sell and has actually made plans to develop
acquired the said property for its mission or the Apostolic Nunciature of
the lots into a townhouse project, but in view of the sellers' breach, it lost
the Philippines. The transfer and disposal of property are likewise clothed
profits of not less than P30,000.000.00.
with a governmental character as the petitioner did not buy and sell the
10. The Holy See moved to dismiss the petition for lack of jurisdiction based on
land for gain but merely because they cannot evict the said squatters in
sovereign immunity from suit.
the property.
11. RTC denied the motion on ground that petitioner already "shed off" its
DOCTRINE: The Holy See, being a duly accredited missionary to the Republic sovereign immunity by entering into a business contract. The subsequent
of the Philippines, is exempted from local jurisdiction and is entitled to the Motion for Reconsideration was also denied hence this special civil action for
immunity rights of a diplomatic mission or embassy. certiorari was forwarded to the Supreme Court.
12. On December 9, 1991, a Motion for Intervention was filed before us by the
Department of Foreign Affairs, claiming that it has a legal interest in the
FACTS: outcome of the case as regards the diplomatic immunity of petitioner, and that
1. Petitioner is the Holy See who exercises sovereignty over the Vatican City in it "adopts by reference, the allegations contained in the petition of the Holy
Rome, Italy, and is represented in the Philippines by the Papal Nuncio, who See insofar as they refer to arguments relative to its claim of sovereign
exercises sovereignty over the Vatican City. immunity from suit"
2. Private respondent, Starbright Sales Enterprises, Inc., is a domestic
corporation engaged in the real estate business. ISSUE/s:
 7. WoN Holy See can invoke sovereign immunity – YES, Holy See is immune limitation of the territory under the Holy See to an area of 108.7
from suit because the act of selling the lot of concern is non-propriety in acres, the position of the Holy See in International Law became
nature. controversial
b. In 1929, Italy and the Holy See entered into the Lateran Treaty,
RULING: WHEREFORE, the petition for certiorari is GRANTED and the where Italy recognized the exclusive dominion and sovereign
complaint in Civil Case No. 90-183 against petitioner is DISMISSED. jurisdiction of the Holy See over the Vatican City. It also recognized
the right of the Holy See to receive foreign diplomats, to send its
RATIO: own diplomats to foreign countries, and to enter into treaties
1. In Public International Law, when a state or international agency wishes to according to International Law.
plead sovereign or diplomatic immunity in a foreign court, it requests the c. The Lateran Treaty established the statehood of the Vatican City
Foreign Office of the state where it is sued to convey to the court that said "for the purpose of assuring to the Holy See absolute and visible
defendant is entitled to immunity. independence and of guaranteeing to it indisputable sovereignty also
in the field of international relations"
2. In the United States, the procedure followed is the process of "suggestion," d. In view of the wordings of the Lateran Treaty, it is difficult to
where the foreign state or the international organization sued in an American determine whether the statehood is vested in the Holy See or in the
court requests the Secretary of State to make a determination as to whether it Vatican City. Some writers even suggested that the treaty created
is entitled to immunity. If the Secretary of State finds that the defendant is two international persons — the Holy See and Vatican City.
immune from suit, he, in turn, asks the Attorney General to submit to the Inasmuch as the Pope prefers to conduct foreign relations and enter
court a "suggestion" that the defendant is entitled to immunity. In England, a into transactions as the Holy See and not in the name of the Vatican
similar procedure is followed, only the Foreign Office issues a certification City, one can conclude that in the Pope's own view, it is the Holy
to that effect instead of submitting a "suggestion" In the Philippines, the See that is the international person.
practice is for the foreign government or the international organization to first 6. The Republic of the Philippines has accorded the Holy See the status of a
secure an executive endorsement of its claim of sovereign or diplomatic foreign sovereign. The Holy See, through its Ambassador, the Papal Nuncio,
immunity. has had diplomatic representations with the Philippine government since
3. On the other hand, the Philippine Foreign Office’s endorsement to the courts 1957
varies. In International Catholic Migration Commission v. Calleja, the 7. There are two conflicting concepts of sovereign immunity
Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor 8. First, the Classical or Absolute theory, which states that a sovereign cannot,
and Employment, informing the latter that the respondent-employer could not without its consent, be made a respondent in the courts of another sovereign.
be sued because it enjoyed diplomatic immunity. In World Health 9. Second, the Newer or Restrictive theory, which states that immunity of the
Organization v. Aquino, the Secretary of Foreign Affairs sent the trial court sovereign is recognized only with regard to public acts or the jure imperii of
a telegram to that effect. In Baer v. Tizon, the U.S. Embassy asked the a state, but not with regard to private acts or the jure gestionis.
Secretary of Foreign Affairs to request the Solicitor General to make, in 10. The mere entering into a contract by a foreign state with a private party cannot
behalf of the Commander of the United States Naval Base at Olongapo City, be the ultimate test. Such an act can only be the start of the inquiry. The
Zambales, a "suggestion" to respondent Judge. The Solicitor General logical question for determining sovereign immunity is whether the foreign
embodied the "suggestion" in a Manifestation and Memorandum as amicus state is engaged in the activity in the regular course of business. If the foreign
curiae. state is not engaged regularly in a business or trade, the particular act or
4. In the case at bench, the Department of Foreign Affairs, through the Office transaction must then be tested by its nature. If the act is in pursuit of a
of Legal Affairs moved with this Court to be allowed to intervene on the side sovereign activity, or an incident thereof, then it is an act jure imperii,
of petitioner. The Court allowed the said Department to file its memorandum especially when it is not undertaken for gain or profit.
in support of petitioner's claim of sovereign immunity. 11. The Court held that Holy See may properly invoke sovereign immunity for
5. Background on the status of Holy See as a sovereign state: its non-suability. As expressed in Sec. 2 Art II of the 1987 Constitution,
a. Before the annexation of the Papal States by Italy in 1870, the Pope generally accepted principles of International Law are adopted by our
was the monarch and he, as the Holy See, was considered a subject Courts and thus shall form part of the laws of the land as a condition and
of International Law. With the loss of the Papal States and the consequence of our admission in the society of nations.
12. It was noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic
Relations that diplomatic envoy shall be granted immunity from civil and
administrative jurisdiction of the receiving state over any real action
relating to private immovable property. The Department of Foreign
Affairs (DFA) certified that the Embassy of the Holy See is a duly
accredited diplomatic missionary to the Republic of the Philippines and
is thus exempted from local jurisdiction and is entitled to the immunity
rights of a diplomatic mission or embassy in this Court. Furthermore, it
shall be understood that in the case at bar, the petitioner has bought and sold
lands in the ordinary course of real estate business, surely, the said transaction
can be categorized as an act jure gestionis.
13. However, petitioner has denied that the acquisition and subsequent
disposal of the lot were made for profit but claimed that it acquired said
property for the site of its mission or the Apostolic Nunciature in the
Philippines. Private respondent failed to dispute this claim.
14. The Holy See is immune from suit because the act of selling the lot of
concern is non-propriety in nature. The lot was acquired through a
donation from the Archdiocese of Manila, not for a commercial purpose,
but for the use of petitioner to construct the official place of residence of
the Papal Nuncio thereof. The right of a foreign sovereign to acquire
property, real or personal, in a receiving state, necessary for the creation and
maintenance of its diplomatic mission, is recognized in the 1961 Vienna
Convention on Diplomatic Relations (Arts. 20-22).
15. The transfer of the property and its subsequent disposal are likewise clothed
with a governmental character as petitioner sold the lot not for profit or gain
rather because it merely cannot evict the squatters living in said property.
16. The Department of Foreign Affairs has formally intervened in this case and
officially certified that the Embassy of the Holy See is a duly accredited
diplomatic mission to the Republic of the Philippines exempt from local
jurisdiction and entitled to all the rights, privileges and immunities of a
diplomatic mission or embassy in this country. The determination of the
executive arm of government that a state or instrumentality is entitled to
sovereign or diplomatic immunity is a political question that is conclusive
upon the courts. Where the plea of immunity is recognized and affirmed by
the executive branch, it is the duty of the courts to accept this claim so as not
to embarrass the executive arm of the government in conducting the country's
foreign relations
 008 SALVACION vs. CA (LAGUILLES) her parents fully deserve. In fine, the application of the law depends on the
July 24, 2013 |Mendoza, J. | Property extent of its justice.

PETITIONER: Karen E. Salvacion thru Federico Salvacion Jr. DOCTRINE: The application of the law depends on the extent of its justice.
RESPONDENTS: Central Bank of the Philippines, China Banking Corporation,
and Greg Bartelli y Northcott Long case loaded with facts. Please read through the entire digest. J
FACTS:
SUMMARY: Greg Bartelli, an American tourist, detained and raped 12-year-old 1. On February 4, 1989, Greg Bartelli, an American tourist, coaxed and lured
Karen Salvacion. Karen was allegedly at the Makati Cinema Square when Greg petitioner Karen Salvacion, then 12 years old to go with him to his apartment.
approached her and asked her if she could teach his niece Filipino. Karen agreed There, Greg detained Karen for four days and was able to rape her once on
and went with him to his apartment in Kalayaan Avenue. Upon arriving at Greg’s February 4, and three times each day on February 5, 6, and 7.
apartment, Karen did not see Greg’s niece. Instead, Greg asked her to go upstairs 2. On February 7, after policemen and people living nearby, rescued Karen,
with him. There, Greg brought her to the bedroom, locked the door, and tied Greg was arrested and detained at the Makati Municipal Jail.
Karen’s hands and feet to the bedpost with a cotton cord. Greg knelt in front of 3. The police recovered from Greg the following:
Karen and inserted his finger in her vagina. When Greg removed his finger, it was a. Dollar Check No. 368;
full of blood. Greg put Johnson’s baby oil on his penis and proceeded to insert b. COCOBANK Bank Book No. 104-108758 (peso account);
his penis into Karen’s vagina. Karen was raped 10 times from February 4 to c. China Banking Corp (dollar account);
February 7. She was able to escape when neighbors heard her screams from a d. P243 cash
small hole in the window by the bathroom. When the police came, Greg was e. Door keys, 6 pieces
arrested and was detained at the Makati Municipal Jail, but he was able to post f. Stuffed teddy bear (used in seducing Karen).
bail. The investigating fiscal filed a criminal case against Greg for serious illegal 4. On Feb. 16, the Makati Investigating Fiscal Edwin G. Condaya filed against
detention and four counts of rape. Karen and her parents also filed with the RTC Greg a criminal case for serious illegal detention, and criminal cases for four
a civil case for damages with preliminary attachment against Greg. The civil case counts of rape. Karen also filed with the RTC Makati a civil case for damages
for preliminary attachment was granted, so the sheriff served a Notice of with preliminary attachment against Greg.
Garnishment on China Banking Corporation. However, the bank refused to honor 5. On Feb. 24, Greg was able to escape from jail by posting bail. By Feb. 28,
said order by invoking Sec. 113 of CB Circular No. 960 to the effect that the the court granted the fiscal’s urgent ex-parte motion for the issuance of
dollar deposits of Greg are exempt from attachment, garnishment, or any other Warrant of Arrest and Hold Departure Order. Pending the arrest of Greg, the
order or process of any court. Hence, this petition. The issue is WoN Greg’s dollar criminal cases were archived.
deposits are exempt from attachment or garnishment due to CB Circular No. 960. 6. The civil case for damages with preliminary attachment was granted. After
Karen posted a bond by FGU Insurance Corporation of P100,000, the writ of
The Court held in the negative. CB Circular No. 960 was enacted when the preliminary attachment was issued.
country’s economy was in shambles; when foreign investments were minimal. 7. The deputy sheriff served a Notice of Garnishment on China Banking
But the realities of present times show that the country has recovered Corporation. However, through a letter, China Banking Corporation invoked
economically; and even if not, the questioned law still denies those entitled to due RA 1405 as its answer to the notice of garnishment.
process of law for being unreasonable and oppressive. Here is a child, who in her 8. The sheriff replied that the garnishment did not violate the secrecy of bank
belief that all Americans are good, and in her gesture of kindness by teaching his deposits since the disclosure is merely incidental to a garnishment properly
alleged niece the Filipino language requested by the American, trustingly went and legally made by virtue of a court order which has placed the subject
with the stranger to his apartment, and that she was raped by the said American, deposits in custodia legis.
Greg Bartelli. Not once, but 10 times. Greg was able to escape from jail and avoid 9. China Banking Corporation then invoked Sec. 113 of Central Bank Circular
punishment. On the other hand, Karen, having received a favorable judgment in No. 960 to the effect that the dollar deposits of Greg are exempt from
the civil case for damages in the amount of more than P1M, could not, however, attachment, garnishment, or any other order or process of any court,
get the award of damages because of this unreasonable law. This questioned law, legislative body, government agency or administrative body.
therefore, makes futile the favorable judgment and award of damages that she and 10. This prompted the counsel for petitioners to make an inquiry with the Central
Bank on whether Sec. 113 of the circular has any exception since said section
 has rendered nugatory the substantive right of Karen to have the claim sought way of determining the exact time because Greg removed her watch.
to be enforced by the civil action secured by way of the writ of preliminary The following day, a Sunday, after a breakfast of biscuit and coke, Greg raped Karen
attachment as granted under Rule 57 of the Rules of Court. while she was still bleeding. For lunch, they also took biscuit and coke. She was raped
11. The Central Bank, in its reply, said that Sec. 113 is absolute in its application again in the afternoon and in the evening, where they had rice for dinner. Greg cooked
and does not admit of any exception. The purpose of the law is to encourage the rice and it looked like “lugaw.”
dollar accounts within the country’s banking system which would help in the Karen said that she did not see any firearm or any bladed weapon. Greg did not tie
development of the economy. The law may be harsh as some perceive it, but her hands and feet nor put a tape on her mouth anymore but she did not cry for fear
it is still the law. that she might be killed; besides, all the windows and doors were closed so even if she
12. The trial court, on April 10, 1989, granted Karen’s motion for leave to serve shouted for help, nobody would hear her.
summons by publication in the civil case. This was published in the Manila On Monday, February 6, Karen was raped three times, once in the morning for thirty
Times once a week for three consecutive weeks. The fact of publication was minutes after a breakfast of biscuits, and again in the evening. At first, Karen did not
attested by by the Advertising Manager of the Metro Media Times, Inc., know that there was a window because everything was covered by a carpet, until Greg
which is the publisher of the newspaper. Greg failed to file his answer, so he opened the window to let some air in, and she found out that the window was covered
was declared in default. by Styrofoam and plywood. That evening, Karen had a chance to call for help,
13. During the hearing ex-parte, plaintiffs presented as witnesses Karen, her although Greg left but kept the door closed. She went to the bathroom and saw a small
father Federico, a certain Joseph Aguilar, and a certain Liberato Madulio. window where she spotted a small hole. She stepped on the bowl and cried for help.
14. The testimony of them are as follows: She cried: “Maawa na po kayo sa akin, tulungan niyo akong makalabas dito. Kinidnap
In the afternoon of Feb. 4, Karen was at the Plaza Fair Makati Cinema Square with ako!” somebody heard her, a woman, but said that Karen is “istorbo.” The woman
her friend Edna whiling away her free time. While she was finishing her snack in front told her to sleep, and no police came.
of Plaza Fair, an American approached her. She was then alone because Edna already The next day, she was raped again for three times. After he raped her for the second
left. The American asked her name and introduced himself as Greg Bartelli. He sat time, Greg left but only for a short while. Upon his return, he caught Karen shouting
beside her and talked to her. He said he was a Math teacher and told her that he has for help but he did not understand what she was shouting about. After raping her the
a sister who is a nurse in NY. His sister allegedly has a daughter who is about Karen’s third time, he left the house again. She shouted for help again and this time, many
age and who was with him in his house along Kalayaan Avenue. Greg asked Karen voices asked for her name. A woman said they will call the police and told her to
what her favorite subject was and she said it’s Filipino. He invited her to his house change her clothes, but she did not because Greg might see her in different clothes
where she could teach Filipino to his niece, and even gave her a stuffed toy to persuade and might kill her. That time, she was wearing Greg’s shirt because the latter washed
her. They walked from Pasong Tamo to Kalayaan. When they reached the apartment, her dress. Greg came and opened the door and asked her if she asked for help because
Karen noticed that Greg’s niece was not there. Greg told her that maybe his niece is there were many policemen outside and she denied it. She changed to her old clothes
upstairs, so he invited Karen to go upstairs. Upon entering the bedroom, Greg and Greg told her to tell the police that she left home and willingly. She heard many
suddenly locked the door and Karen became nervous. Greg got a piece of cotton cord voices but could not understand, and when she heard somebody going upstairs, the
and tied Karen’s hands with it, and then he undressed her. Karen cried for help but door was opened and she saw a policeman. She told them that she was kidnapped.
Greg strangled her. He took a packing tape and he covered her mouth with it and At the police station, she made a written statement which was marked as Exhibit A.
circled it around her head. They proceeded to the NBI where she was examined by a doctor. After the incident,
Greg suddenly pushed Karen towards the bed and tied her feet and hands spread apart Karen changed a lot; she does not play with her siblings anymore and is always in a
to the bed posts. He knelt in front of her and inserted his finger in her sex organ. She state of shock.
tried to shout but no sound could come out because there were tapes on her mouth. 15. the court rendered judgment in favor of petitioner and ordered Greg to pay
When Greg withdrew his finger it was full of blood. He then got a Johnson’s Baby Oil Karen and her parents the following:
and applied it to his sex organ as well as to her sex organ. He then tried to insert his a. P500,000 for moral damages
penis into her vagina, but he failed to do so. Karen merely presumed that he was able b. To her parents P150,000 each
to insert his penis a little, because she could not see. Karen could not recall how long c. For Karen and her parents P100,000 for exemplary damages
Greg was in that position. d. 25% of the total amount of damages as attorney’s fees
e. P10,000 for litigation expenses
After that, Greg stood up and went to the bathroom to wash and told Karen to take a
f. Cost of the suit
shower. Greg changed the mattress because it was full of blood. After the shower, 16. Pursuant to an Order granting leave to publish notice of decision, said notice
Karen was allowed to sleep. The incident happened around 4pm, but Karen has no was published in the Manila Bulletin. After the lapse of 15 days from the date
 of the last publication of the notice of judgment and the decision became Thus, where the petition has far-reaching implications and raises
final, petitioners tried to execute on Greg’s dollar deposit with China Banking questions that should be resolved, it may be treated as one for
Corporation. But the bank invoked Sec. 113 of CB Circular No. 960. Hence mandamus.
this petition. 8. Here is a child, who in her belief that all Americans are good, and in her
gesture of kindness by teaching his alleged niece the Filipino language
ISSUE/s: requested by the American, trustingly went with the stranger to his apartment,
1. WoN Greg’s dollar deposits are exempt from garnishment – NO, because it and that she was raped by the said American, Greg Bartelli. Not once, but 10
would make futilethe favorable judgment and award of damages that Karen times.
and her parents fully deserve. 9. Greg was able to escape from jail and avoid punishment. On the other hand,
2. WoN CB Circular No. 960 should be adjudged as unconstitutional – NO, but the chid, having received a favorable judgment in the civil case for damages
it is made inapplicable to this case because of its peculiar circumstances. in the amount of more than P1M, could not, however, get the award of
damages because of this unreasonable law. This questioned law, therefore,
RULING: Provisions of Section 113 of CB Circular No. 960 and PD 1246, insofar as makes futile the favorable judgment and award of damages that she and her
it amends Section 8 of RA 6426, are hereby held to be INAPPLICABLE to this case parents fully deserve.
because of its peculiar circumstances. Respondents are hereby REQUIRED to 10. If Karen’s fate had happened to anybody’s own kin, it would be difficult for
COMPLY with the writ of execution and to RELEASE to petitioners the dollar deposit him to fathom how the incentive for foreign currency deposit could be more
of Greg Bartelli in such amount as would satisfy the judgment. important than his child’s rights to said award of damages.
11. It is worth mentioning that RA 6426 was enacted in 1983 or at a time when
RATIO: the country’s economy was in shambles; when foreign investments were
1. This Court finds the petition to be partly meritorious. minimal. But the realities of present times show that the country has
2. Respondent Central Bank alleges that the Monetary Board in issuing Sec. 113 recovered economically; and even if not, the questioned law still denies those
of CB Circular No. 960 did not exceed its power because the subject entitled to due process of law for being unreasonable and oppressive.
provision is copied verbatim from a portion of RA 6246. Hence, it was not 12. SOLGEN’S COMMENT: The present petition has far-reaching
the Monetary Board that grants exemptions from attachment or garnishment implications on the right of a national to obtain redress for a wrong committed
to foreign currency deposits, but the law itself. by an alien who takes refuge under a law and regulation promulgated for a
3. Central Bank also alleges that it does not violate substantive due process purpose which does not contemplate the application envisaged by the alien.
because it was based on law, and the law seems reasonable and it applies to 13. In fine, the application of the law depends on the extent of its justice.
all members of a class. Eventually, if the Court rules that the questioned provision is applicable
4. The Central Bank said that one reason for exempting foreign currency to a foreign transient, injustice would result specially to a citizen
deposits from attachment or any other order or process of any court, is to aggrieved by a foreign guest like accused Greg Bartelli. When the statute
assure the development and speedy growth of the Foreign Currency Deposit is silent or ambiguous, it must be presumed that the lawmaking body
System and the Offshore Banking System in the Philippines and to encourage intended justice to prevail.
the inflow of foreign currency deposits into the banking institutions to 14. Is there no conflict of legal police here? Dollar against Peso? Shielding
contribute to the economic development of the country. or protecting the dollar deposit of a transient alien depositor against
5. China Bank, on the other hand, said that it is not unmindful of the inhuman injustice to a national and victim of a crime? This situation calls for
sufferings of Karen from the breastly hands of Greg; that it is only too willing fairness against legal tyranny. We definitely cannot have both ways and
to release the dollar deposits of Greg but it is restrained from doing so in view rest in the belief that we have served the ends of justice.
of RA 6426.
6. Karen deserves to receive the damages awarded to her by the court but
this petition for declaratory relief can only be entertained and treated as
a petition for mandamus to require the respondents to honor and comply
with the writ of execution.
7. The SC has no original and exclusive jurisdiction over a petition for
declaratory relief. However, exceptions to this rule have been recognized.
 001 TEMPLETON v. BABCOCK (Marcos) contrary, her repeated declarations reveal a fixed intention of returning ultimately
Oct. 2, 1928 | Street, J. | Domicile to the United States.

PETITIONER: Beatrice Babcock Templeton DOCTRINE: It is a recognized rule that the intention with which removal is
RESPONDENTS: William Rider Babcock made from a particular state determines whether or not the domicile is abandoned;
and intention is revealed only in the acts and declarations of the person concerned.
SUMMARY: Jennie Rider Babcock from Massacussets, moved to Manila where
she lived with her son, W.R. Babcock. Years later, she joined the family of her FACTS:
daughter, Mrs. Beatrice Babcock Templeton (B.B), in San Francisco California. 1. Jennie Rider Babcock spent her married life in the State of Massachusetts.
During these years W. R. Babcock (son) and G. D. Templeton (son-in-law), were 2. When her husband died in 1908, she moved a year later to Manila where she
running a business in Manila, which had been incorporated under the style of lived with her son, William Rider Babcock (W.R. Babcock).
Babcock & Templeton, Inc. Jennie had acquired stock in the company and had 3. In 1817, she joined the family of her daughter, Mrs. Beatrice Babcock
no other independent source of income than the dividends derived therefrom. Templeton (B.B. Templeton), in San Francisco California.
After remaining with the Templetons in San Francisco for several months, Jennie 4. During these years W. R. Babcock and G. D. Templeton (son-in-law), were
returned to Manila. During this stay in Manila she occupied an apartment in the running a business in Manila, which had been incorporated under the style of
house of her son. She then returned to San Francisco and lived with the Babcock & Templeton, Inc., with Babcock as president of the company and
Templetons. Her second return to San Francisco was important and was later Templeton as its vice- president.
given weight in determining her domicile. Her acts and statements concluded that 5. As a branch office had been opened in San Francisco requiring the presence
she acquired a domicile in California (see fact 11 for list of acts). Babcock & of an officer of the company, Templeton took up his abode in San Francisco
Templeton, Inc., decided to close its office in San Francisco and to open a branch for the purpose of managing the business of said branch.
in New York City. They moved to New York and Jennie occupied a part of the 6. Jennie had acquired stock in the company and had no other independent
Templetons’ apartment. The sojourn of Jennie in New York was apparently not source of income than the dividends derived therefrom.
congenial, since, after a few months of experience in that city, she returned to 7. After remaining with the Templetons in San Francisco for several months,
Manila. She stayed in Manila until her death but she continuously expressed her Jennie returned to Manila in July, 1918.
intention of returning back to California. After her death, an envelope was found 8. During this stay in Manila she occupied an apartment in the house of her son,
among her effects. The paper referred to a post mortem disposition of all her where she remained until August, 1920. She then returned to San Francisco
property consisting of corporate stock, jewelry, personal effects and money. The and lived with the Templetons until May, 1923.
instrument is admittedly of a testamentary character, but is not executed as a will 9. Her second return to San Francisco was important since her acts and
under the law governing the execution of wills made in the Philippines. B.B. statements concluded that she acquired a domicile in California. (this was
Templeton filed a petition with the CFI of Manila to secure probate under section given weight by the trial court so take note)
636 of the Code of Civil Procedure, which authorizes probate by our courts of a 10. Among the important acts and circumstances are:
will made within the Philippine Islands by a citizen or subject of another state or a. Her son-in-law, Templeton, owned a home in San Francisco in
country, when such will is executed in accordance with the law of the state or which he lived, without any apparent intention of removing from the
country of which the testator is a citizen or subject, and which might be proved state;
under the law of such state or country. The issue is WoN Jennie, at the time the b. Upon arriving in San Francisco, Jennie established herself as a
will was made, had her domicile in the State of California? – YES. Because she practitioner in Christian Science, a cult to which she was attached;
had not intention to abandon her domicile in California. There are no declarations c. She engaged in political activities, taking part in a parade
of the testatrix in evidence which would tend to show that, upon removal to New advertising a cause in which she was interested, and she voted in at
York, she had any intention of acquiring legal domicile in that state. On the least one general election that occurred in that state;
contrary her short stay there and her repeated statements made thereafter show d. She formed an attachment for California, and in many conversations
that she could not possibly have had any intention of making that state a place of thereafter with intimate friends, she referred to California as her
permanent abode. Also, however long the testatrix had resided in the Philippine home state and expressed her intention of returning there and
Islands, she at no time had any intention of residing here permanently. On the building a home in which to live.
11. In the year 1923, Babcock & Templeton, Inc., decided to close its office in of the State of California, though temporarily residing in Manila at the time
San Francisco and to open a branch in New York City. of her death.
12. Upon arriving in New York State, the Templetons established themselves in 25. Under the first paragraph of the Fourteenth Amendment to the
White Plains, near New York City. Here Jennie occupied part of the Constitution of the United States, the citizenship of a person born in the
apartment which the Templetons had taken, United States, is dependent upon the place of residence, or domicile; and
13. The sojourn of Jennie in New York was apparently not congenial, since, after the question before us ultimately resolves itself into a contention over the
a few months of experience in that city, she returned to Manila, arriving at point whether the testatrix had ever acquired a legal domicile in the State of
this place in January, 1924. California and whether, supposing such domicile to have been acquired, she
14. The impression that conditions in New York made upon her may be gauged may not have lost it as a result of her removal from that state.
by a statement subsequently made by her to one of her friends in Manila, 26. B.B. Templeton, mother of the three children who are principal beneficiaries
"Deliver me from living in New York." of the will, contends that the testatrix acquired a legal domicile in the State
15. What really brought her back to the Philippine Islands, apart from her dislike of California by residence therein over two periods of time between 1917 and
to the environment in New York, is not certain, but she suggested to friends 1923, and that such domicile was never lost.
here, after arriving, that a desire to economize the cost of living may have 27. W.R. Babcock, the brother of the proponent, resists the probate of the will on
had a part in her course. the ground that the testatrix had never acquired a legal domicile in the State
16. She stayed in Manila until her death but she continuously expressed her of California, or that, if she had, such domicile had been lost under the
intention of returning back to California. conditions presently to be discussed.
17. After her death, an envelope was found among her effects shortly after her
death, which occurred on September 3, 1926. ISSUE/s: Whether or not the testatrix, at the time the will was made, had her domicile
18. The paper bears the date of May 26, 1926, is written wholly in the in the State of California? – YES. Because she had not intention to abandon her
handwriting of the deceased and bears her proper signature. domicile in California.
19. The purport of the paper is to the effect that the deceased leaves her stock and
money to her three grandchildren, bearing the surname Templeton, namely, RULING: The judgment will therefore be affirmed, and it is so ordered, with costs
G. Douglas Templeton, Jr., Constance Babcock Templeton, and Billy against the appellant.
Babcock Templeton, but the writer further states that all interest and
dividends are to be given to her only daughter, Mrs. Templeton, as well as RATIO:
her jewelry and personal effects "for their support until the youngest is of 17. The finding of the trial court to the effect that the deceased had acquired a
age." domicile in the State of California is in our opinion based upon facts which
20. It referred to a post mortem disposition of all her property consisting of sufficiently support said finding.
corporate stock, jewelry, personal effects and money. 18. In particular, we are of the opinion that the trial court committed no error in
21. B.B. Templeton filed a petition with the CFI of Manila on Sept. 8, 1926 to attaching importance to the circumstance that the deceased had voted in
secure probate of a paper writing purporting to express the wishes of deceased California elections. Though not of course conclusive of acquisition of
Jennie Rider Babcock. domicile, voting in a place is an important circumstance and, where the
22. The instrument is admittedly of a testamentary character, but is not executed evidence is scanty, may have decisive weight.
as a will under the law governing the execution of wills made in the 19. The exercise of the franchise is one of the highest prerogatives of citizenship,
Philippines. and in no other act of his life does the citizen identify his interests with the
23. The instrument therefore is not offered for probate under section 618 and state in which he lives more than in the act of voting.
related provisions of the Code of Civil Procedure but under section 636, 20. We are of the opinion that the conclusion of the trial court, to the effect that
which authorizes probate by our courts of a will made within the Philippine acquired domicile had not been lost, is in conformity with the evidence.
Islands by a citizen or subject of another state or country, when such will is 21. It is a recognized rule that the intention with which removal is made from
executed in accordance with the law of the state or country of which the a particular state determines whether or not the domicile is abandoned;
testator is a citizen or subject, and which might be proved under the law of and intention is revealed only in the acts and declarations of the person
such state or country. concerned.
24. In the petition, it was alleged that Jennie at the time of her death was a resident 22. There are no declarations of the testatrix in evidence which would tend to
 show that, upon removal to New York, she had any intention of acquiring
legal domicile in that state. On the contrary her short stay there and her
repeated statements made thereafter show that she could not possibly have
had any intention of making that state a place of permanent abode.
23. As was pointed out by this court in In Re Estate of Johnson, a person
transferring his domicile from one state of the American Union to another
loses his domicile in the state of his earlier abode upon acquiring a domicile,
or citizenship, in the state of his new abode. The acquisition of the new legal
domicile extinguishes the old. Certainly in this case it cannot be said with any
propriety that the domicile of the testatrix in California was suppressed by
the acquisition of a new domicile in New York State.
24. It is evident from the proof that the removal of the testatrix from California
to New York did not proceed from her volition but resulted from
circumstances over which she had no primary control, her motive being found
in her desire to be with her daughter and grandchildren.
25. It may also be here stated that the testatrix had kin in New York State whom
she had visited more than once during her abode in California; and she
appears to have inherited some property from a sister who had been living in
New York and who died before the return of the testatrix to the Philippine
Islands.
26. But it is said that, even supposing that the testatrix had not acquired a
domicile in New York, yet she was a resident of the Philippine Islands at the
time of her death, and that, having established herself in these Islands as a
place of permanent abode, her will should not be admitted to probate as the
will of a citizen of another state.
27. But the proof shows that however long the testatrix had resided in the
Philippine Islands, she at no time had any intention of residing here
permanently. On the contrary, her repeated declarations reveal a fixed
intention of returning ultimately to the United States.
28. Again, it is a rule that a citizen of the United States cannot acquire
citizenship in the Philippine Islands by residence here, however long
continued (In Re Estate of Johnson, 39 Phil., 156).
29. The testatrix therefore remained at the time of her death a citizen of the
United States. Her will is therefore provable under section 636 of the Code
of Civil Procedure as the will of a citizen of another state or country.
 ALCANTARA v SECRETARY OF INTERIOR (ARMAND) DOCTRINE: . There being nothing in the above-mentioned provisions which could
May 17, 1935 | Goddard, J. | provide a definite answer to the issue at hand, the Court resorted to law and
PETITIONER: Juan L. Alcantara et al jurisprudence of similar issue from the different States of the limited States.
RESPONDENTS: Secretary of Interior, Balala Electoral Board of Inspectors et al
SUMMARY: Petitioners are confinees at the Culion Leper Colony in Culion,
Palawan, having voted in previous decisions in the Philippine Islands. That after a
public meeting, they adopted a resolution demanding a right to vote in the upcoming FACTS:
Plebiscite and requesting the electoral precincts be established within the radius of the 22. This is an original action instituted in this court by the petitioners for a writ
colony so that qualified voters therein could register. The resolution was sent to the of mandamus to compel the respondents "to register and inscribe the
Governor-General who referred the same to the Secretary of Interior, and through its petitioners as qualified electors at the electoral precinct at Balala, Culion,
legal division ruled that no new electorate precincts could be created because the Palawan, in order that they can vote in the plebiscite to be held on May 14,
Plebiscite was considered a special election. 1935, on the vital question of the acceptance or rejection of the Constitution
Because of the ruling, Petitioners requested by telegram, the Interior for the Commonwealth of the Philippine Islands."
Department to authorize the Balala Electoral Board of Inspectors to register the 23. The petitioners allege that they are qualified voters residing at Culion Leper
qualified voters of the colony. The request was denied on the ground that Petitioners Colony, Culion, Palawan, having voted in previous elections in the Philippine
were not bona fide residents of Culion Palawan, not having been residents of Culion Islands; that in a public mass meeting held on April 5, 1935, they adopted a
for six months next preceding the day of the plebiscite, for they have not acquired resolution demanding the right to vote in the plebiscite and requesting that
residence in Culion as they are confined as lepers against their will and having no electoral precincts be established within the radius of the Culion Leper
intention to reside therein as provided in Secs. 430-431 of the Administrative Code, Colony in order that the qualified voters therein could register, which
as amended. The issue is WoN Alcantara et al are residents of Culion, Palawan, resolution was sent to his Excellency, the Governor-General, who referred it
and as such, qualified to register and vote therein in the upcoming plebiscite. – to the Honorable, the Secretary of the Interior; that the Department of the
YES. The Court ruled that, in the United States, the Constitution limits the right of Interior, through its legal division, ruled that no new electoral precincts could
the States to discriminate against person by reason of race, color or previous be created at Culion Leper Colony inasmuch as the plebiscite is treated as and
condition of servitude in their exercise of the right of suffrage.That at present, the considered as a special election; that in view of this ruling the petitioners
closest thing the Philippines to a Constitution is the Jones Law which only provision requested, by telegram, the Interior Department to authorize the Balala
contained in that law as to the qualification of voters are found under Sec. 15. Also, Electoral Board of Inspectors, Culion, Palawan, to register the qualified
the Philippine Legislature has prescribed the qualifications and disqualifications of voters of Culion Leper Colony; that this request was refused upon the ground
voter s in Sec. 431 and 432, respectively, of the Revised Administrative Code. There that the petitioners were not bona fide residents of Culion, Palawan; that on
being nothing in the above-mentioned provisions which could provide a definite April 23, 1935, the petitioners Juan L. Alcantara, Miguel Valdes, Adolfo
answer to the issue at hand, the Court resorted to law and jurisprudence of similar Almeda and Dionisio Pañgilinan, accompanied by Attorney Martin Miras,
issue from the different States of the limited States. The Court found that in one State, appeared before the chairman of the Balala Electoral Board of Inspectors and
it held that 'for the purpose of voting, no person shall be deemed to have gained or requested him to register and inscribe them in the officials list of qualified
lost a residence while a student at any seminary of learning.In other jurisdictions, a voters in order that they might vote on May 14, 1935, and that their request
contrary conclusion was reached upon the theory that under such a constitutional was denied on the ground that no specific instructions to register them had
provision, an inmate of such institution may acquire a residence at the home. In been received from the Department of the Interior.
another case, it was held that 'in the absence of such constitutional prohibition, the 24. The principal allegation of the respondents, by way of special defense, is "that
rule in is that a permanent member of a soldier's home has a residence at such home the herein petitioners are not qualified voters, because they shall not have
for the purpose of voting'. After comparing such, the Court ruled that under our been residents of Culion for six months next preceding the day of voting, for
liberal, petitioners are residents of Culion, Palawan, and entitled to register and vote they have not acquired residence in Culion as they are confined therein as
in the upcoming plebiscite, but the case must be remanded to the Balala Electoral lepers against their will, and they have no intention to permanently reside
Board of Inspectors to determine if petitioners have the prescribed qualifications and there (sections 430-431 of the Administrative Code as finally amended by
none of the disqualifications under Sec. 431 and 432 of the Revised Administrative Acts Nos. 3387, sec. 1, and 4112, secs. 1 to 3); and in view thereof, the
Code. respondent Secretary of the Interior has ruled that the petitioners are not
qualified voters and therefore cannot be registered under the law."
 SEC. 431. Qualifications prescribed for voters. — Every male or female person who is not a citizen or
subject of a foreign power, twenty-one years of age or over, who shall have been a resident of the
ISSUE/s:
Philippines for one year and of the municipality in which he shall offer to vote for six months next
WoN Alcantara et al are residents of Culion, Palawan, and as such, qualified to preceding the day of voting is entitled to vote in all elections if comprised within either of the following
register and vote therein in the upcoming plebiscite- YES. After comparing law three classes:
and jurisprudence of similar issues from different States, the Court ruled that under (a) Those who, under the laws in force in the Philippine Islands upon the twenty-eight day of August,
our liberal, petitioners are residents of Culion, Palawan, and entitled to register and nineteen hundred and sixteen, were legal voters and had exercised the right of suffrage.
(b) Male persons who own real property to the value of five hundred pesos, declared in their name for
vote in the upcoming plebiscite, but the case must be remanded to the Balala taxation purposes for a period of not less than one year prior to the date of the election, or who annually
Electoral Board of Inspectors to determine if petitioners have the prescribed pay thirty pesos or more of the established taxes.
qualifications and none of the disqualifications under Sec. 431 and 432 of the (c) Those who are able to read and write either Spanish, or English, or a native language.
SEC. 432. Disqualifications. — The following persons shall be disqualified from voting:
Revised Administrative Code.
(a) Any person who, since the thirteenth day of August, eighteen hundred and ninety-eight, has been
sentenced by final judgment to suffer not less than eighteen months of imprisonment, such disability not
RULING: This opinion is promulgated now in order to make shown some of the having been removed by plenary pardon.
reasons for granting the writ.Writ granted without costs. (b) Any persons who has violated an oath of allegiance taken by him to the United States.
(c) Insane or feeble-minded persons.
(d) Deaf-mutes who cannot read and write.
RATIO: (e) Electors registered under subsection (c) of the next preceding section who, after failing to make sworn
20. In the United States the right of suffrage is derived from the states under the statement to the satisfaction of the board of inspectors at any of its two meetings for registration and
state constitutions, subject to the Fifteenth Amendment to the National revision, that they are incapacitated for preparing their ballots due to permanent physical disability,
Constitution which limits the right of the states to discriminate against present themselves at the hour of voting as incapacitated, irrespective of whether such incapacity be real
or feigned.
persons by reason of their race, color or previous condition of servitude. This 23. The only question raised by the answer of the respondents is whether or not
being so it follows that, when a state constitution enumerates and fixes the the petitioners have acquitted a residence for voting purposes in the
qualifications of those who may exercise the right of suffrage, the legislature municipality in which they desire to vote. The petitioners allege that they
cannot take from nor add to said qualifications unless the power to do so is have and the respondents deny this allegation. There is no hard and fast rule
conferred upon it by the constitution itself. by which to determine where a person actually resides. "Each case must
21. At present the nearest approach to a constitution that we have in the depend on its particular facts or circumstances. Three rules are, however, well
Philippines in our Organic Act, the Jones Law, enacted August 29, 1916, by established: first, that a man must have a residence or domicile somewhere;
the Congress of the United States. "The organic law (or Act) of a territory second, that where once established it remains until a new one is acquired;
takes the place of a constitution as the fundamental law of the local and third, a man can have but one domicil at a time."
government. The only provisions contained in that law as to the qualification 24. In order to arrive at a correct solution of the question raised by the
of voters reads as follows: respondents in this case one must not be misled by the decisions of the courts
SEC. 15. That at the first election held pursuant to this Act, the qualified electors shall be those having the
qualifications of voters under the present law; thereafter and until otherwise provided by the Philippine in states where there are constitutional provisions as to residence for voting
Legislature herein provided for the qualifications of voters for Senators and Representatives in the purposes, vastly different from those of the Jones Law and the Revised
Philippines and all officers elected by the people shall be as follows: Administrative Code.
Every male person who is not a citizen or subject of a foreign power twenty-one years of age or over
25. In some of the states there is a constitutional provision to the effect that for
(except insane and feeble-minded persons and those convicted in a court of competent jurisdiction of an
infamous offense since the thirteenth day of August, eighteen hundred and ninety-eight), who shall have the purpose of voting no person shall be deemed to have gained or lost a
been a resident of the Philippines for one year and of the municipality in which he shall offer to voter for residence while a student at any seminary of learning. Under such a provision
six months next preceding the day of voting, and who is comprised within one of the following classes: it has been held "that a student does not acquire a residence for voting
(a) Those who under existing law are legal voters and have exercised the right of suffrage.
purposes merely by attending such an institution." (In re Barry) In addition
(b) Those who own real property to the value of 500 pesos, or who annually pay 30 pesos or more of the
established taxes. to such provisions as to students, constitutions of some states provide that
(c) Those who are able to red and write either Spanish, English, or a native language. "For the purpose of voting, no person shall be deemed to have gained or lost
22. Under the authority conferred upon it by the above quoted section the a residence by reason shall be deemed to have gained or lost a residence by
Philippine Legislature has prescribed the qualifications and disqualifications reason of his presence or absence while ... kept at any almshouse or other
of voters in sections 431 and 432 of the Revised Administrative Code, which asylum at public expense; ... ."Under such a provision the rule in some
read as follows: jurisdictions is "that inmates of soldiers' homes, by going to and residing in
such home, neither lose their old, nor gain a new, residence, though they
 intend to reside in the home permanently. Hence they are not entitled to vote
except at their place of residence before becoming such inmates.
26. In other jurisdictions, however, a contrary conclusion has been reached, upon
the theory that under such a constitutional provision an inmate such an
institution may acquire a residence at the home.
27. In the absence of such a constitutional prohibition the rule is that a permanent
member of a soldiers' home has a residence at such home for the purpose of
voting. (Lankford vs. Gebhart)
28. There being no such provisions or prohibitions in the Jones Law nor in
the sections of the Revised Administrative Code, quoted above, we see no
reason for applying in this jurisdiction the legal doctrine of the courts of
the states which have adopted such, or similar, constitutional provisions.
29. There are a large number of people confined in the Culion Leper Colony.
They are not permitted to return to their former homes to vote. They are not
allowed to visit their former homes even though they have been separated
from near and dear relatives who are not afflicted as they are. Why split hairs
over the meaning of residence for voting purposes under such circumstances?
Assuming that the petitioners intend to return to their former homes if at some
future time they are cured, this intention does not necessarily defeat their
residence before they actually do return if they have been residents "of the
Philippine Islands for one year and of the municipality in which they offer to
vote for six months next preceding the day of voting." Surely a mere intention
to return to their former homes, a consummation every humane person desires
for them, not realized and which may never be realized should not prevent
them, under the circumstances, from acquiring a residence for voting
purposes.
30. This court is of the opinion that, under our liberal law, such of the
petitioners as have been residents of the Philippine Islands for one year
and residents for six months in the municipality in which they desire to
vote and have the other qualifications prescribed for voters in section
431 of the Revised Administrative Code and who have none of the
disqualifications prescribed in section 432 of the same Code were entitled
to register and vote in the plebiscite of May 14, 1935. Having reached this
conclusion and being unable to determine from the record whether the
petitioners have the prescribed qualifications for voters and none of the
prescribed disqualifications this court on May 11, 1935, sent the above
mentioned telegram to the parties in this case.
 003 VELILLA v. POSADAS (MERILLES) 3. On February 24, 1931, a petition for appointment of special administrator of
December 19, 1935 | Butte, J. | Domicile of Taxpayer the estate of Moody was filed by Maxwell Thebaut with the CFI of Manila
(CASE1)
a. Copy of said petition is marked as Exhibit BB
PETITIONER: A.L Velilla, administrator of the estate of Arthur Graydon 4. On April 10, 1931, Ida Palmer filed a petition for the probate of the will of
Moody Moody (CASE2) and the same was after hearing duly probated.
RESPONDENTS: Juan Posadas, Jr. CIR a. A decree of probate was made on May 5, 1931.
b. Copies of the petition and decree (Marked as Exhibits CC and DD)
SUMMARY: Arthur G. Moody, an American citizen, came to the Philippine
5. On July 14, 1931, Ida Palmer was declared to be thes ole and only heiress of
Islands in 1902 or 1903 and engaged actively in business in the PH up to the time
the deceased Moody by virtue of an order issued by the Court in case 1, a
of his death in Calcutta, India, on February 18, 1931. In his will (which was
copy of said order is marked as Exhibit EE
admitted to probate), he bequeathed all his properties to his sister, Ida Palmer. At
a. During the hearing for the declaration of heirs Ida Palmer presented
the time of his death left an estate consisting principally of bonds and shares of
as evidence a letter dated February 28, 1925, and addressed to her
stock of corporations organized under the laws of the Philippine Islands, bank
by Moody (copy of letter marked as Exhibit FF)
deposits and other intangibles and personal property. 6. The property of Moody consisted principally of bonds and shares of stock of
corporations organized under the laws of PH, bank deposits and other
These properties were assessed for taxation purposes. Palmer paid the income personal properties
(P77k) and inheritance taxes (13k) in protest. The protest was denied, hence the a. A certified copy of the inventory was submitted to court (Exhibit
appeal to the CA. Palmer contends that the assessment and collection is without
GG)
basis for Moody was not a domiciliary of the PH at the time of his death, therefore
b. This stipulation does not, however, cover the respective values of
not subject to PH tax laws.
said properties for the purpose of the inheritance tax.
7. On July 22, 1931 the BIR prepared for the estate of Moody an inheritance tax
The issue is whether Moody Moody was considered as domiciled in the PH at the
return, a certified copy is marked Exhibit HH
time of his death – YES, domicile is the place of usual residence. It appears that
8. On September 9, 1931, an Income Tax Return for the fractional period from
Moody left the PH because he was diagnosed with leprosy and was ordered to be
January 1 to June 30, 1931 (Exhibit II) was prepared by BIR for the estate of
confined in the Culion Leper Colony as required by the law. Moody did not want Moody
to comply and left the country without proper documentation. His travels from 9. On December 3, 1931, the committee on claims and appraisals filed with he
Paris and later on to Calcutta, India was not to establish domicile in said countries, court its report (Exhibit KK)
but rather because he was a fugitive, not from justice, but from confinement in 10. On September 15, 1931, BIR addressed to the attorney for Ida Palmer a letter
the Culion Leper Colony in accordance with the law of the Philippine Islands.
(Exhibit LL)
a. On October 15, 1931 the attorney of Palmer answered the letter of
DOCTRINE: To effect the abandonment of one’s domicile, there must be a
the CIR (Exhibit MM)
deliberate and provable choice of a new domicile, coupled with actual residence
b. On November 4, 1931, BIR responded to the above letter (Exhibit
in the place chosen, with a declared or provable intent that it should be one’s fixed
NN)
and permanent place of abode, one’s home.
c. On December 7, 1931, another letter by the attorney of palmer was
sent (Exhibit OO)
11. Previously on July 22, 1931, The estate of Moody paid under protest the sum
FACTS: of P50,000.
(Note: You can skip to fact #14) a. On January 19, 1932 another sum of P40,019.75
1. Arthur Graydon Moody died in Calcutta, India on February 18, 1931 b. Of the total, P77, 018.39 covers the assessment for inheritance tax
2. Moody executed in the PH a will, certified copy of which marked Exhibit AA and P13, 001.41 covers the assessment for income tax
a. By virtue of which will, he bequeathed all his property to his only 12. On January 21, 1932, the CIR overruled the protest made by Ida Palmer
sister, Ida M. Palmer, who then was and still is a citizen and resident 13. Hence, this appeal, seeking to recover the P77k and P13k in taxes paid.
of the State of New York, United States of America. 14. On appeal both parties introduced oral and documentary evidence from which
 it appears: follows:
a. That Arthur G. Moody, an American citizen, came to the Philippine a. "SEC. 1536. Conditions and rate of taxation. — Every transmission
Islands in 1902 or 1903 and engaged actively in business in these by virtue of inheritance, devise, bequest, gift mortis causa or
Islands up to the time of his death in Calcutta, India, on February advance in anticipation of inheritance, devise, or bequest of real
18, 1931. property located in the Philippine Islands and real rights in such
b. He had no business elsewhere and at the time of his death left an property; of any franchise which must be exercised in the Philippine
estate consisting principally of bonds and shares of stock of Islands; of any shares, obligations, or bonds issued by any
corporations organized under the laws of the Philippine Islands, corporation or sociedad anonima organized or constituted in the
bank deposits and other intangibles and personal property valued by Philippine Islands in accordance with its laws; of any shares or
the commissioners of appraisal and claims at P609,767.58 and by rights in any partnership, business or industry established in the
the Collector of Internal Revenue for the purposes of inheritance tax Philippine Islands or of any personal property located in the
at P653,657.47. Philippine Islands shall be subject to the following tax:”
c. All of said property at the time of his death was located and had its 2. It is alleged in the complaint that at the time of his death, Arthur G. Moody
situs within the Philippine Islands. So far as this record shows, he was a "non-resident of the Philippine Islands."
left no property of any kind located anywhere else. 3. The answer, besides the general denial, sets up as a special defense that
d. In his will, Exhibit AA, executed without date in Manila in "Arthur G. Moody, now deceased, was and prior to the date of his death, a
accordance with the formalities of the Philippine law, in which he resident in the City of Manila, Philippine Islands, where he was engaged
bequeathed all his property to his sister, Ida M. Palmer actively in business.
15. The substance of Ida Palmer’s cause of action is as follows: 4. Moody was never married and there is no doubt that he had his legal domicile
a. "That there is no valid law or regulation of the Government of the in the Philippine Islands from 1902 or 1903 forward during which time he
Philippine Islands under or by virtue of which any inheritance tax accumulated a fortune from his business in the Philippine Islands.
may be levied, assessed or collected upon transfer, by death and a. He lived in the Elks’ Club in Manila for many years and was living
succession, of intangible personal properties of a person not there up to the date he left Manila the latter part of February, 1928,
domiciled in the Philippine Islands, and the levy and collection by under the following circumstances: He was afflicted with leprosy in
defendant of inheritance tax computed upon the value of said stocks, an advanced stage and had been informed by Dr. Wade that he
bonds, credits and other intangible properties as aforesaid would be reported to the Philippine authorities for confinement in
constituted and constitutes the taking and deprivation of property the Culion Leper Colony as required by the law.
without due process of law contrary to the Bill of Rights and organic b. Distressed at the thought of being thus segregated and in violation
law of the Philippine Islands.” of his promise to Dr. Wade that he would voluntarily go to Culion,
ISSUE/s: he surreptitiously left the Islands the latter part of February, 1928,
1. WON Moody was considered as domiciled in the PH at the time of his death under cover of night, on a freighter, without ticket, passport or tax
– YES, domicile is the place of usual residence. To effect the abandonment clearance certificate.
of one’s domicile, there must be a deliberate and provable choice of a new c. The record does not show where Moody was during the remainder
domicile, coupled with actual residence in the place chosen, with a declared of the year 1928. He lived with a friend in Paris, France, during the
or provable intent that it should be one’s fixed and permanent place of abode, months of March and April of the year 1929 where he was receiving
one’s home. treatment for leprosy at the Pasteur Institute.
d. The record does not show where Moody was in the interval between
RULING: The SC affirms the judgment of the trial court, first, because the property April, 1929, and November 26, 1930, on which latter date he wrote
in the estate of Arthur G. Moody at the time of his death was located and had its situs a letter, Exhibit B, to Harry Wendt of Manila, offering to sell him
within the Philippine Islands and, second, because his legal domicile up to the time of his interest in the Camera Supply Company, a Philippine
his death was within the Philippine Islands. corporation, in which Moody owned 599 out of 603 shares. In this
letter, among other things, he states: "Certainly I’ll never return
RATIO: there to live or enter business again."
1. Section 1536 of the Revised Administrative Code (as amended) provides as e. He was, therefore, a fugitive, not from justice, but from confinement
 in the Culion Leper Colony in accordance with the law of the foreign country.
Philippine Islands. 8. As for the income taxes: the assessment is sound. The only income tax
5. There is no statement of Moody, oral or written, in the record that he had assessed against the estate was the additional tax or surtax that had not been
adopted a new domicile while he was absent from Manila. paid by the Camera Supply Company for which the estate, having actually
a. Though he was physically present for some months in Calcutta prior received the income, is clearly liable.
to the date of his death there, the appellant does not claim that 9. As for inheritance tax: The same is likewise sound. Inheritance tax and the
Moody had a domicile there although it was precisely from Calcutta additional income tax in question are entirely distinct. They are assessed
that he wrote and cabled that he wished to sell his business in Manila under different statutes.
and that he had no intention to live there again. 10. The SC affirms the judgment of the trial court, first, because the property in
b. Much less plausible, it seems to us, is the claim that he established the estate of Arthur G. Moody at the time of his death was located and had
a legal domicile in Paris in February, 1929. The record contains no its situs within the Philippine Islands and, second, because his legal domicile
writing whatever of Moody from Paris. There is no evidence as to up to the time of his death was within the Philippine Islands.
where in Paris he had any fixed abode that he intended to be his
permanent home.
c. There is no evidence that he acquired any property in Paris or
engaged in any settled business on his own account there. There is
no evidence of any affirmative factors that prove the establishment
of a legal domicile there. The negative evidence that he told Cooley
that he did not intend to return to Manila does not prove that he had
established a domicile in Paris. His short stay of three months in
Paris is entirely consistent with the view that he was a transient in
Paris for the purpose of receiving treatments at the Pasteur Institute.
d. The evidence in the record indicates clearly that Moody’s continued
absence from his legal domicile in the Philippines was due to and
reasonably accounted for by the same motive that caused his
surreptitious departure, namely, to evade confinement in the Culion
Leper Colony; for he doubtless knew that on his return he would be
immediately confined, because his affliction became graver while
he was absent than it was on the day of his precipitous departure and
he could not conceal himself in the Philippines where he was well
known, as he might do in foreign parts.
6. The (OLD) Civil Code (art. 40) defines the domicile of natural persons as
"the place of their usual residence."
a. The record before us leaves no doubt in our minds that the "usual
residence" of this unfortunate man, whom appellant describes as a
"fugitive" and "outcast", was in Manila where he had lived and
toiled for more than a quarter of a century, rather than in any foreign
country he visited during his wanderings up to the date of his death
in Calcutta.
7. To effect the abandonment of one’s domicile, there must be a deliberate and
provable choice of a new domicile, coupled with actual residence in the place
chosen, with a declared or provable intent that it should be one’s fixed and
permanent place of abode, one’s home. There is a complete dearth of
evidence in the record that Moody ever established a new domicile in a
 004 GALLEGO v. VERRA (PELIÑO) residence or bodily presence in the new locality, (2) an intention to remain there, and
November 24, 1941 | Ozaeta, J. | Domicile/Residence (3) an intention to abandon the old domicile. In other words, there must be an animus
non revertendi and an animus manendi.
PETITIONER: Pedro Gallego
RESPONDENT: Vicente Verra

SUMMARY: Gallego was a native of Abuyog, Leyte. He ran for municipal mayor
in 1937, but he lost. Since he incurred debts and was unemployed, he looked for
work and eventually found one in Malaybalay, Bukidnon. He was employed as a
nurseryman in the chinchona plantation of the Bureau of Forestry. He returned to FACTS:
Abuyog on July 30, 1938 where he was offered employment, but he rejected it and 1. Petition for certiorari to review the decision of the CA which affirmed the CFI of
continued to work in the nursery until his resignation in September 1940. While in Leyte, which declared illegal and void Gallego’s election to the office of the
Malaybalay, the government offered him free house and plantation, but he never took municipal mayor in Abuyog, Leyte in the general elections of December 1940,
his family in Malaybalay and never availed of the land offered by the government on the ground that he did not have the residence qualification and was ordered
and he also had property in Abuyog, which he acquired while he was in Malaybalay. ousted from office.
In October 1, 1938, he registered himself as an elector in Malaybalay and also voted a. Verra was the unsuccessful opponent of Gallego, who was declared elected
in the election for assemblymen held in December 1938. On 20 January 1940, he by the municipal board of canvassers with a majority of nearly 800 votes.
obtained and paid for his residence certificate from the municipal treasurer of 2. Pedro Gallego (Gallego) was a native of Abuyog, Leyte.
Malaybalay, which certificate it was stated that he had resided in Malaybalay for 1 yr a. After studying in the Catarman Agricultural School in the Samar province,
and a half. In December 1940, Gallego ran for municipal mayor. Gallego won, so he was employed as a school teacher in the municipality of Catarman, Samar,
Verra questioned his win on the ground that Gallego did not have the residence as well as in the municipalities of Burawen, Dulag, and Abuyog, province of
qualification. The trial court and the CA both ruled against Gallego. Hence, this Leyte, and also in the Agusan province.
petition. The issue in this case is whether or not Gallego has been a resident of 3. In 1937, he resigned as a school teacher in Abuyog, Leyte, and presented his
Abuyog for at least 1 yr prior to the December 1940 elections. The SC held in the candidacy for municipal mayor in his home town, but he was defeated.
affirmative. The term "residence" as used in the election law is synonymous with a. After the defeat, unemployed and in debt, he went to Mindanao to find work.
"domicile," which imports not only intention to reside in a fixed place but also He went to Oriental Misamis, no work.
personal presence in that place, coupled with conduct indicative of such intention. In b. He proceeded to the sitio of Kaato-an, municipality of Malaybalay,
order to acquire a domicile by choice, there must concur: (1) residence or bodily Bukidnon, where he arrived on 20 June 1938 and immediately found
presence in the new locality, (2) an intention to remain there, and (3) an intention to employment as a nurseryman in the chinchona plantation of the Bureau of
abandon the old domicile. In other words, there must be an animus non revertendi Forestry. (nurseryman - worker or owner of a plant or tree nursery;
and an animus manendi. The purpose to remain in or at the domicile of choice must chinchona - tree, whose bark is being used for medicine)
be for an indefinite period of time. The acts of the person must conform with his 4. 30 July 1938, he returned to Abuyog because he had been offered an employment
purpose. The change of residence must be voluntary; the residence at the place as teacher in the public school of barrio of Union, municipality of Sogod, Leyte,
chosen for the domicile must be actual; and to the fact of residence there must be but he didn’t accept the offer, so he returned to Kaato-an on 23 August 1938 and
added the animus manendi. In this case, SC believes he did not reside in Malaybalay resumed employment as a nurseryman until his resignation on September 1940.
with the intention of remaining there indefinitely and of not returning to Abuyog: (1) a. Although the government offered him free house and plantation in Kaato-an:
his departure after his defeat in that election was temporary and only for the purpose (1) he never took his family there, (2) never availed of the offer of the
of looking for employment to make up for the financial drawback he had suffered as government of a parcel of 10 ha of land within the reservation of the
a result of his defeat at the polls; (2) he did not take his wife and children chinchona plantation. (3) He and his wife own real property in Abuyog, part
notwithstanding the offer of a free house by the Government; (3) he bought a piece of which he acquired during his stay in Malaybalay.
of land in Abuyog while working in Malaybalay; (4) he frequently visited his family 5. 1 October 1938, he registered himself as an elector in precinct no. 14 of Lantapan,
no less than 3 times, notwithstanding the distance; (5) he did not avail of the housing municipality of Malaybalay, Bukidnon, and voted there in the election for
and plantation offered by the government. assemblymen held in December 1938.
6. The trial court noted that in his voter’s affidavit he did not fill the blank space
DOCTRINE: In order to acquire a domicile by choice, there must concur: (1) corresponding to the length of his time he had resided in Malaybalay.
7. On 20 January 1940, he obtained and paid for his residence certificate from the
 municipal treasurer of Malaybalay, which certificate it was stated that he had 3. SC is persuaded that the facts weigh heavily against the theory that Gallego had
resided in Malaybalay for 1 yr and a half. lost his residence or domicile in Abuyog.
8. Based upon the facts that: (1) his registration as a voter, (2) his having actually a. SC believes he did not reside in Malaybalay with the intention of
voted in Malaybalay in 1938 election for assemblymen, and (3) his residence remaining there indefinitely and of not returning to Abuyog. He is a
certificate for 1940, trial court and CA declared that Gallego had acquired a native of Abuyog.
residence or domicile of choice in Malaybalay, Bukidnon, and had lost his b. Notwithstanding his periodic absences from there previous to 1937, when he
domicile of origin in Abuyog, Leyte, at the time he was elected mayor of Abuyog, was employed as teacher in Samar, Agusan, and other municipalities of
and that, his election was void, following the case of Tanseco v. Arteche and Leyte, he always returned there.
Nuval v. Guray. c. In the year 1937, he resigned as a school teacher and presented his candidacy
9. Hence, this petition. for the office of mayor of said municipality. His departure therefrom after
his defeat in that election was temporary and only for the purpose of
ISSUE/s: looking for employment to make up for the financial drawback he had
11. WON Gallego has been a resident of Abuyog for at least 1 yr prior to the suffered as a result of his defeat at the polls.
December 1940 elections. - YES, he did not reside in Malaybalay with the d. After he had found employment in Malaybalay, he did not take his wife and
intention of remaining there indefinitely and of not returning to Abuyog. He is a children thereto notwithstanding the offer of a free house by the Government.
native of Abuyog. Notwitstanding his absences, he always returned to Abuyog. e. He bought a piece of land in Abuyog and did not avail himself of the offer
of the government of 10 ha of land within the chinchona reservation in
RULING: WHEREFORE, the judgment of the CA is REVERSED, with the costs of this Malaybalay, where he worked as a nurseryman.
instance against the respondent. f. During the short period of about two years he stayed in Malaybalay as a
government employee, he visited his home town and his family no less than
RATIO: 3 times, notwithstanding the great distance between the two places.
On whether Gallego has been a resident of Abuyog 4. The facts of the case are more analogous to those of Larena v. Teves,57 Yra v.
1. The term "residence" as used in the election law is synonymous with "domicile," Abaño, Vivero v. Murillo, than to those of Nuval v. Guray and Tanseco v. Arteche,
which imports not only intention to reside in a fixed place but also personal which were followed by the CA.
presence in that place, coupled with conduct indicative of such intention. 5. Gallego contends that even assuming that he had lost his residence or domicile in
2. In order to acquire a domicile by choice, there must concur: (1) residence or Abuyog, he reacquired it more than 1 yr prior to December 10, 1940.
bodily presence in the new locality, (2) an intention to remain there, and (3) a. In support, he invokes his letter or note addressed to Valeriano Tupa, vice
an intention to abandon the old domicile. president of the political faction to which Gallego belongs, in which note he
a. In other words, there must be an animus non revertendi and an animus announced his intention to launch his candidacy again for municipal mayor
manendi. of Abuyog as early as the month of May 1939.
b. The purpose to remain in or at the domicile of choice must be for an b. But SC says it’s not necessary to pass upon the contention since the
indefinite period of time. The acts of the person must conform with his consensus of SC is that Gallego did not lose his domicile of origin.
purpose. The change of residence must be voluntary; the residence at 6. The manifest intent of the law in fixing a residence qualification is, to exclude
the place chosen for the domicile must be actual; and to the fact of a stranger or newcomer, unacquainted with the conditions and needs of a
residence there must be added the animus manendi. community and not identified with the latter, from an elective office to serve
that community; and when the evidence on the alleged lack of residence

57
In The Teves case, Pedro Teves in 1904 had his own house in Dumaguete, Negros Oriental, where he has constantly conclusive, and may be attacked in a corresponding judicial proceeding. If, according to the ruling laid down in the case
been living with his family and he has never had any house in which he lived either alone or with his family in Bacong, of Vivero vs. Murillo, cited above, mere registration in a municipality in order to be an elector therein does not make one
Negros Oriental. All that he has done in Bacong was to register as elector in 1919 through an affidavit stating that he was a resident of said municipality; if, according to constant rulings the word 'residence' is synonymous with 'home' or
a resident of Bacong; run for representative in the second district of the province of Negros Oriental and vote in the said 'domicile,' and denotes a permanent dwelling place, to which an absent person intends to return; if the right to vote in a
municipality in said year; run again for reelection in 1922, launch his candidacy for member of provincial board of the municipality requires the concurrence of two things, the act of residing coupled with the intention to do so; and if the
province in 1925, stating under oath in all certificates of candidacy that he was a resident of Bacong. The affidavit made Teves, has always lived with his family in the municipality of Dumaguete and never in that of Bacong, he has never lost
by him upon registering as elector in the municipality of Bacong in the year 1919, stating that he was a resident of his residence in Dumaguete. The fact that his registration as elector in the municipality of Bacong was cancelled only on
Bacong; his 2 certificates of candidacy for the office of representative for the second district of the Province of Oriental April 6, 1934, upon his petition, did not disqualify him to be a candidate for the office of municipal president of said
Negros, which were filed, the former in the year 1919 and 1922, and the certificate of candidacy for the office of member municipality of Dumaguete on the ground that, as has been stated in the case of Yra vs. Abano, cited above, registration
of the provincial board filed by him in the year 1925, in every one of which he stated that he was a resident of the in the list of voters is not one of the conditions prescribed by section 431 of the Election Law in order to be an elector;
municipality of Bacong, are at most a prima facie evidence of the fact of his residence in the municipality of Bacong, neither does failure to register as such constitute one of the disqualifications prescribed in section 432 of said law."
which is required by law in order that the corresponding officials could register him as an elector and candidate, and not
qualification is weak or inconclusive and it clearly appears, as in the instant
case, that the purpose of the law would not be thwarted by upholding the
right to the office, the will of the electorate should be respected.
a. Gallego is a native of Abuyog, had run for the same office of municipal
mayor of said town in the election preceding the one in question, had only
been absent for about 2 years without losing contact with his townspeople
and without the intention of remaining and residing indefinitely in the place
of his employment; and he was elected with an overwhelming majority of
nearly 800 votes in a third-class municipality.
b. These considerations cannot be disregarded without doing violence to the
will of the people of said town.
 005 VILLAHERMOSA v. COMMISSIONER of IMMIGRATION of jus soli, is the predominating factor on questions of citizenship.
(PUNSALAN) Sec. 1, Art. IV of the 1935 Constitution enumerates who are PH citizens: (4)
March 31, 1948| Bengzon, J. | Nationality Those whose mothers are citizens of the Philippines and, upon reaching the
age of majority, elect Philippine citizenship.
PETITIONER: Florentina Villahermosa (Please take note of the year as the case talks about nationality/citizenship, something
RESPONDENTS: The Commissioner of Immigration Atty. Mejia might ask in connection with the corresponding Consti provision)
FACTS:
SUMMARY: On March 1947, a party of 69 Chinese led by Delfin Co landed on 1. Night of March 24, 1947 – A party of 69 Chinese landed on the shores of Sto.
the shores of Sto. Domingo, Ilocos Sur in an attempt to evade PH immigration Domingo, Ilocos Sur in an attempt to evade PH immigration laws.
laws. Delfin is an 18y.o. minor (note that this was before new Civil Code) whose e. Leading them was Delfin Co (18 y.o., born in Paniqui, Tarlac),
father is Chinese and whose mother is petitioner Florentina Villahermosa, a whose father is Chinese, named Co Suy alias Yu Kui, and whose
Filipina. In the year prior, Feb. 1946, Delfin left the PH for China as a Chinese mother is petitioner Florentina Villahermosa (Villahermosa).
repatriate with his relative Co Chi Pe. But due to financial difficulties, he took 2. Co Suy died in July 1940
steps to return to PH. He met a Chinese named Co Soon Tiong who he agreed 3. The year prior, Feb. 1946, Delfin left the Philippines for China on board S/S
with to smuggle Chinese compatriots into the PH. The voyage was undertaken Cushman as a Chinese repatriate with his relative Co Chi Pe.
but they were apprehended immediately after arrival. Eventually, the 4. However, due to financial difficulties in China, he took steps to return to PH.
Commissioner of Immigration rendered a decision deporting Delfin Co to China. f. But he met a Chinese named Co Soon Tiong who informed him of
Villahermosa (mother), upon learning of her son’s apprehension, sought to a plan to smuggle their compatriots into the PH
reacquire her PH citizenship by taking an oath of allegiance with the civil registry g. Delfin agreed to lead the party to Ilocos Sur where his mother had
of Tarlac (She had become a Chinese citizen when she married Co Suy). On the relatives who could render valuable assistance.
strength of such reacquisition, she contended that Delfin, being a minor, followed 5. The voyage was undertaken; however, they were discovered and
the former’s citizenship and was a national not subject of deportation. apprehended immediately after arrival.
Issue: WoN Delfin Co must be returned to China – YES, he is not a PH citizen 6. March 27 – Delfin was examined by the Commissioner of Immigration
and even if he is, at the time he entered his country from China, he was a Chinese (Commissioner)
subject to deportation, and any subsequent change to his status cannot erase 7. April 10, 1947 – Formal investigation of the case.
the taint of his unlawful, surreptitious entry. Furthermore, Sec. 1 Art IV of h. 4 days later, the corresponding board recommended that Delfin Co
the 1935 Constitution still classifies him as an alien, being a minor who cannot be deported to China as a Chinese citizen.
yet elect PH citizenship. i. The Commissioner agreed with the board and rendered a decision
WoN Delfin Co follows the citizenship of his mother – NO, Commonwealth Act deporting Delfin.
No. 63 does not provide that upon repatriation of a Filipina, her children acquire 8. On April 29, 1947 – Villahermosa (the mother), after knowing the
PH citizenship. It would be illogical to consider Delfin as repatriated like his apprehension of her son, filed in the civil registry of Tarlac under
mother because he never was a Filipino citizen and could not have reacquired Commonwealth Act No. 63 an oath of allegiance for the purpose of resuming
such citizenship. Villahermosa, due to her marriage, became a Chinese her PH citizenship which she had lost upon her marriage to Co Suy.
citizen. Only after reacquisition of citizenship by her could Delfin claim that his j. On the strength of such reacquisition of PH citizenship, it contended
mother was a Filipina based on par. 4, Sec. 1 of Art. IV of the Constitution. BUT before the immigration authorities that Delfin, being a minor
according to the same, he had to elect PH citizenship upon attaining age of (NOTE: age of majority might be 21 y.o. during this time; prior
majority, which he had yet to do as he is still a minor and therefore, still a to New Civil Code), followed the citizenship of his mother, and
Chinese citizen. Where such minor son has violated the immigration laws and was a national not subject to deportation
rendered himself liable to deportation, no rule or principle should frustrate the 9. The contentions were overruled. They were repeated in a CFI Manila through
Government’s action by the interposition of the mother’s right to custody a writ of habeas corpus requested by Villahermosa and likewise, were
rejected.
DOCTRINE: Mere birth in the PH of a Chinese father and a Filipino mother
does not ipso facto confer Philippine citizenship and that jus sanguinis, instead ISSUE/s:
 8. WoN Delfin Co must be returned to China – YES, he is not a PH citizen and Philippine citizenship and that jus sanguinis, instead of jus soli, is the
even if he is, at the time he entered his country from China, he was a Chinese predominating factor on questions of citizenship.
subject to deportation, and any subsequent change to his status cannot
erase the taint of his unlawful, surreptitious entry. Furthermore, Sec. 1 As to Delfin following his mother Villahermosa’s citizenship
Art IV of the 1935 Constitution still classifies him as an alien, being a 5. Commonwealth Act No. 63 does not provide that upon repatriation of a
minor who cannot yet elect PH citizenship. Filipina, her children acquire PH citizenship.
9. WoN Delfin Co follows the citizenship of his mother – NO, CA No. 63 does 6. It would be illogical to consider Delfin as repatriated like his mother because
not provide that upon repatriation of a Filipina, her children acquire PH he never was a Filipino citizen and could not have reacquired such
citizenship. It would be illogical to consider Delfin as repatriated like his citizenship.
mother because he never was a Filipino citizen and could not have a. While his Chinese father lived, Delfin was not a Filipino. His
reacquired such citizenship. Villahermosa, due to her marriage, became mother was not a Filipina – she was Chinese.
a Chinese citizen. Only after reacquisition of citizenship by her could Delfin b. After his father’s death, Villahermosa continued to be a Chinese
claim that his mother was a Filipina based on par. 4, Sec. 1 of Art. IV of the until she reacquired her Filipino citizenship in April 1947.
Constitution. BUT according to the same, he had to elect PH citizenship c. Only after that reacquisition could Delfin claim that his mother was
upon attaining age of majority, which he had yet to do as he is still a a Filipina based on par. 4, Sec. 1 of Art. IV of the Constitution. BUT
minor and therefore, still a Chinese citizen. according to the same, he had to elect PH citizenship upon
attaining age of majority.
RULING: Decision of lower court denying the petition for habeas corpus is d. Until he becomes of age and makes the election, he is the Chinese
AFFIRMED. citizen that he was at the time of his father’s demise.
7. It does not help Villahermosa’s case to assert her right to retain custody of
RATIO: her minor son and to keep him there.
As to Delfin Co being returned to China a. Where such minor son has violated the immigration laws and
1. Two reasons why Delfin Co must be returned to China: rendered himself liable to deportation, no rule or principle should
a. He is not now a PH citizen. frustrate the Government’s action by the interposition of the
b. Granting that he is, at the time he entered his country from China, mother’s right to custody.
he was a Chinese subject to deportation, and any subsequent change b. This consideration becomes stronger where the re-assumption of her
in his status cannot erase the taint of his unlawful, surreptitious citizenship seems to be an attempt to impede Delfin’s banishment,
entry. who by the way, besides being guilty of violating PH laws, has not
2. Sec. 1, Art. IV of the 1935 Constitution enumerates who are PH citizens: shown any signs of eagerness to adopt our ways of life.
a. Those who are citizens of the Philippine Islands at the time of the 8. SC declares that Delfin Co is not now a Filipino. Furthermore, SC also
adoption of this Constitution. declares that he having entered this country surreptitiously is subject to
b. Those born in the Philippine Islands of foreign parents who, before deportation.
the adoption of this Constitution, had been elected to public office
in the Philippine Islands. Hilado, J. concurring
c. Those whose fathers are citizens of the Philippines. 9. Petitioner Villahermosa, by the very purpose for which she filed the oath of
d. Those whose mothers are citizens of the Philippines and, upon allegiance, made herself unworthy and disqualified to be repatriated under
reaching the age of majority, elect Philippine citizenship. CA No. 63.
e. Those who are naturalized in accordance with law. a. Sec. 4 of said Act: repatriation shall be effected by merely taking the
3. Delfin Co’s claim can only be predicated on Par. 4 (Ratio 2d). necessary oath of allegiance to the Commonwealth of the PH (now
a. But being a minor, he has not had the opportunity to elect PH Republic) and registration in the proper civil registry. Allegiance
citizenship, and therefore he is as yet an alien, his father being a requires the person pledging it, among others things, to respect and
Chinese. obey the laws of the country to which the pledge is made.
4. The SC has previously held that, after the Constitution, mere birth in the b. But the person taking the oath did so for the purpose of legalizing a
PH of a Chinese father and a Filipino mother does not ipso facto confer most serious violation of the immigration laws of the PH by her son.
 c. An oath of allegiance taken for that end is an affront to the of a bunch of Chinese in question. If he did not commit any crime or offense,
sovereign, besides the criminal responsibilities it entails. only a subverted sense of justice may justify punishing him with deportation.

Perfecto, J. dissenting Tuason, J. dissenting

1. Art. 18 of the (old) Civil Code: Children, while they remain under 10. Same with J. Perfecto in arguing Art. 18 of the old Civil Code.
parental authority, have the nationality of their parents. 11. The intention of the framers of the Constitution to withhold Philippine
2. The rule is reaffirmed by the Naturalization Law No. 2927, as amended by citizenship from the child of a Filipino mother and an alien father until the
Act No. 3448: Children under 20 years of age and residing in the PH shall child reaches the age of majority does not create an exception to the general
become citizens upon naturalization of their parents. rule.
3. The rule is founded on human nature. Because minor children depend on their a. It is my humble opinion that the deferment of conferring
parents for their sustenance, support and protection, it stands to reason that Filipino citizenship on such a child extends only to those cases in
they should follow the nationality of their parents. They have to live under which both parents are alive and retain their foreign nationality,
the same roof with their parents and as near enough to them to enjoy parental or where the father having died, the mother has not chosen to
care and protection. Minor children have to follow their parents wherever the regain her original citizenship.
latter, by political, moral, mental and economic exigencies, have to establish 12. The decision says: "This petition is moreover to be denied on the strength of
their abode. precedence heretofore established, because Delfin was a Chinese when he
4. To accept the majority decision is to justify the possibility of a fratricidal arrived here; and any posterior change of status cannot affect the legality of
battle, should the nation of one happen to be at war with that of the other. his detention for the purposes of deportation."
5. There is unanimity of opinion that Florentina Villahermosa is a Filipino a. I do not think this doctrine is applicable to the present case. The
citien. Born of Filipino parents in Lapog, Ilocos Sur and has resided in the principle established by the decisions cited on this point is that
PH since her birth. She never went to China. There should not be any question an immigrant cannot take advantage of his unlawful entry to
that Delfin Co follows the nationality of his mother. acquire the conditions imposed by the immigration laws.
6. That the majority thinks that Villahermosa took said oath of allegiance to b. US v. Chan Sam: "to say to him (immigrant) that if by any means he
provoke some indignation as if she has committed a crime has no ground. can gain an unlawful entry in the Islands he will be relieved of the
She only exercised a right expressly granted by law. The statutory provision consequences owing from his unlawful act if at any time after he
does not deal with motives or purposes. gains his unlawful entrance he changes his status and assumes the
a. That she exercised the same right for the purpose of protecting her occupation of one of the privileged classes, would be to set a
son against an action harmful to him is only logical. premium on the unlawful but successful evasion by Chinese laborers
b. Nothing objectionable in her taking advantage of the law to give of the laws prohibiting their entrance into the Islands."
tangible expression to her maternal love. 13. In the case at hand the conversion of the immigrant to Philippine citizenship
7. Since his birth on May 31, 1928, Delfin Co has been a resident of the PH was entirely independent of his will and of his presence in the Philippines.
until Feb. 2, 1946 when he stealthily went to China. Having returned on a. The bond that binds the petitioner and her child existed before the
March 24, 1947 to the PH, it is only natural that he should want to remain latter entered the Philippine territory and not from the date of her
here. By the repatriation of his mother, he became ipso facto a Filipino repatriation only.
citizen. As a resident of the PH and as a PH citizen, he is entitled to stay. b. It is the legal and absolute right of the immigrant's mother to reclaim
8. There are indications that he is entitled to more pity than blame, by his failure her Philippine citizenship regardless of any mental reservation, her
to resist the wiles of a scheming person, who took undue advantage of his motives or her attitude toward her country. The legality of her
immaturity (by smuggling compatriots). reacquisition of Philippine citizenship is nowhere challenged.
9. Did Delfin Co commit any crime or offense punishable by law? If he did, let 14. Assuming then that Delfin Co's nationality follows that of his mother, as we
him be prosecuted and sentenced through due process of law, and if believe it does, has Co forfeited his right to be with her as a result of his
deportation is the punishment provided by law by competent courts of justice, entering the Philippines unlawfully?
let the judgment be rendered and enforced. But it is admitted on all sides that a. I know of no law which sanctions such punishment for an
there is no law punishing the act of Delfin of rendering help to the smuggling immigrant's fault.
 b. If the theory is that the immigrant must first be purged of his sin by
deportation after which he may be allowed to come back and settle
here, the Court would be adopting an empty ceremony that would
lead to no useful purpose nor enhance the prestige of the
administration of law.

Feria, J.
15. I concur in this dissenting opinion (nice)
 006 In the Matter of the Petition of Robert Cu v. Republic of the persons, stating that they are citizens of the Philippines and personally know the
Philippines (Sarmiento) petitioner to be a resident of the Philippines for the period of time required by this
July 18, 1951 | Tuason, J. | Citizenship Act and a person of good repute and morally irreproachable, and that said
petitioner has in their opinion all the qualifications necessary to become a citizen
PETITIONER: IN THE MATTER OF THE PETITION OF ROBERT CU TO of the Philippines and is not in any way disqualified under the provisions of this
BE ADMITTED AS A CITIZEN OF THE PHILIPPINES. ROBERT CU, Act. The petition shall also set forth the names and post office addresses of such
PETITIONER AND APPELLEE. witnesses as the petitioner may desire to introduce at the hearing of the case."
RESPONDENTS: REPUBLIC OF THE PHILIPPINES, OPPOSITOR AND
APPELLANT FACTS:
1. PETITION FOR NATURALIZATION: Robert Cu filed a petition for
SUMMARY: Robert Cu filed a petition for naturalization. RTC found him to be naturalization setting forth facts required and appropriate for that purpose, but at
a Filipino citizen both by right of birth and by right of selection and dismissed the the hearing he said that he was a citizen of the Philippines; and upon the
petition. The pronouncement was based solely on the testimony of Cu that he was conclusion of the trial, the Court of First Instance of Rizal found him "to be a
born in Bulacan on 1913. Government protested stating that the testimony was a Filipino citizen, both by right of birth and by right of selection," and dismissed
mere conclusion. Cu said that he considers himself as a Filipino because his the petition for naturalization, holding impliedly that being already a Philippine
mother is a Filipina. However, he is unsure whether his mother and father were citizen he did not have to be naturalized.
married. Thus, making it inadequate to serve as basis for declaring the petitioner 2. The lower court's pronouncement that the applicant is a Philippine citizen is based
a Philippine citizen—granting for the sake of argument that such declaration is solely on the applicant's following testimony:
authorized on the application filed and on the issues joined in these proceedings. Q. Where were you born?
If the applicant's parents were legally married, which is to be presumed, then he A. I was born in Angat, Bulacan.
was born a Chinese citizen and continued to be so, unless upon the age of majority Q. When?
he elected Philippine citizenship (Art. IX, sec. 1, par. 4, Philippine Constitution), A. 1913.
which he confessedly did not do. ISSUE: Whether or not Cu is qualified to be a
Q. At present, what citizenship do you have?
Filipino Citizen. NO. The 2 witnesses requirement by Section 7 of the
Naturalization law were not complied with. Dr. Jose Ku Yeg Keng testimony, A. Subject of the Philippines.
neither supported that he was a citizen of this country nor eligible as a vouching Why do you petition before this Court to be admitted as a citizen of the
Q.
Philippines?
witness in a proceeding of this character. Dr. Pastor Gomez, on the other hand
was withdrawn as a witness. In naturalization petitions, the Courts are peculiarly A. On account of the fact that when I was a kid of about five months old, my
mother died. She was a Filipina. Then my father brought me to China right
at the mercy of the witnesses offered by the candidate. Such candidate takes care after that. At the age of five, we left China, and I was given to the care of
to see that only those who are friendly to him, are offered as witnesses. The Courts Dona Margarita Emanahas (Mangahas).
cannot be expected to possess acquaintance with the candidates presenting
themselves for naturalization—in fact, no duty rests upon them in this particular; 3. Upon motion of the attorney for the Government, who protested that the last
so that witnesses appearing before them are in a way insurers of the character of answer (that the applicant is a Filipino citizen) was a mere conclusion of the
the candidate concerned, and on their testimony the courts are of necessity witness, the testimony was ordered stricken out.
compelled to rely. A witness who is incompetent renders an application void A a. But the petitioner proceeded: "I consider myself a Filipino citizen on
competent witness cannot be substituted for an incompetent one. The question of account of the fact that my mother is (was) a Filipina and I was born in
a witness' qualifications in naturalization proceedings is therefore a matter of more the Philippines.
than usual importance. b. My only fault was that I failed to file my application to elect Philippine
citizenship. That is why I am now asking this Court to make a judgment
DOCTRINE: Section 7 of the Revised Naturalization Law (Commonwealth Act on that." Further on he testified:
No. 473) provides that the petition, for citizenship, besides stating the petitioner's Q. Was your mother legally married to your father?
qualifications as enumerated in the Act, "must be signed by the applicant in his A. The way I know it, they are not legally married.
own handwriting and be supported by the affidavit of at least two credible
 Q.
Have you ever seen your father after you returned to the Philippines when petitioners born in the Philippines is five years (Sec. 3) and in other cases ten
you were five years old? years (Sec. 2, par. 2).
A. No, Your Honor a. By their testimony, the two witnesses who made affidavits and gave
evidence in support of the application were not qualified for this role.
4. These statements make plain that the applicant was at best uncertain that his i. Dr. Jose Ku Yeg Keng admitted that his father was a Chinese national
parents were unmarried to each other, and are utterly inadequate to serve as and his mother a Filipina; and when asked, "Did you actually elect the
basis for declaring the petitioner a Philippine citizen—granting for the sake Philippine citizenship? Have you filed any citizenship application by
of argument that such declaration is authorized on the application filed and election in writing?", he answered, "I have not in the sense that I did
on the issues joined in these proceedings. not have any proceedings in it," True, he said, "I am a member of the
a. The strong legal presumption that the applicant was born in wedlock— reserve force of the Philippine Army. I was an R. 0. T. C. trainee. I
that his parent were lawful husband and wife—cannot be destroyed by trained in the Philippine Army. I was called during the war." And he
evidence so slim and shaky. also said, in answer to further questions, that he had voted in one of
5. If the applicant's parents were legally married, which is to be presumed, then he the post-liberation elections and that "at present I am a government
was born a Chinese citizen and continued to be so, unless upon the age of majority employee, and I am a member of the faculty of the University of the
he elected Philippine citizenship (Art. IX, sec. 1, par. 4, Philippine Constitution), Philippines, and also I am a resident physician of the Philippine
which he confessedly did not do. General Hospital."
ii. But these circumstances alone made this witness neither a citizen of
ISSUE: Whether or not Cu is qualified to be a Filipino Citizen this country nor eligible as a vouching witness in a proceeding of this
RULING: Wherefore, the appealed decision is affirmed in so far as it dismissed the character.
petition for naturalization and reversed in so far as it declared the applicant a citizen iii. As to the other witness, Dr. Pastor Gomez, he testified that "he had
of the Philippines, with costs against the appellee. This dismissal, however, will be known Mr. Cu since liberation, about August, 1945."
without prejudice to the right of the petitioner to file a new application for iv. Besides, after this answer was given, the counsel for the Government
naturalization. objected to the witness' testifying any further, and the objection having
been sustained, Dr. Gomez was withdrawn.
RATIO: 3. In United States vs. Martorana, the District Court of the United States for the
1. The question that remains is, Is the petitioner entitled to be admitted to Philippine Eastern District of Pennsylvania held: "Under Naturalization Act, June 29, 1906,
citizenship under the present application ? c. 3592, Section 4, 34 Stat. which requires a petition for naturalization to be
a. Section 7 of the Revised Naturalization Law (Commonwealth Act No. verified by the affidavits 'of at least two credible witnesses who are citizens of the
473) provides that the petition, for citizenship, besides stating the United States,' stating certain facts relating to the applicant, a petition not so
petitioner's qualifications as enumerated in the Act, "must be signed by verified by at least two persons who are citizens is not merely voidable but void."
the applicant in his own handwriting and be supported by the The Court went further and said that such petition could not be amended.
affidavit of at least two credible persons, stating that they are citizens 4. In the case of In re Kornstain, 268 Fed. Rep. 182, the court expressed the same
of the Philippines and personally know the petitioner to be a resident of idea and reasoned: "In naturalization petitions, the Courts are peculiarly at the
the Philippines for the period of time required by this Act and a person mercy of the witnesses offered by the candidate. Such candidate takes care to see
of good repute and morally irreproachable, and that said petitioner has in that only those who are friendly to him, are offered as witnesses.
their opinion all the qualifications necessary to become a citizen of the a. The Courts cannot be expected to possess acquaintance with the
Philippines and is not in any way disqualified under the provisions of candidates presenting themselves for naturalization—in fact, no duty
this Act. The petition shall also set forth the names and post office rests upon them in this particular; so that witnesses appearing before
addresses of such witnesses as the petitioner may desire to introduce at them are in a way insurers of the character of the candidate concerned,
the hearing of the case." and on their testimony the courts are of necessity compelled to rely. A
2. WITNESSES: According to this provision, the witnesses must be citizens of the witness who is incompetent renders an application void
Philippines and "personally know the petitioner to be a resident of the b. A competent witness cannot be substituted for an incompetent one.
Philippines for the period of time required by this Act," which in cases of c. The question of a witness' qualifications in naturalization proceedings is
therefore a matter of more than usual importance."
5. The above decisions are not binding upon this Court, but it is a rational rule of
statutory construction that a statute adopted from another state or country will be
presumed to be adopted with the construction placed upon it by the courts of that
state or country before its adoption.
a. Such construction is regarded as of great weight, or at least persuasive,
and will generally be followed if found reasonable, and in harmonywith
justice and public policy, and with other laws of the adopting jurisdiction
on the subject.
b. We find the United States courts' reasoning to be sound and reasonable
and we make it our own.
6. It is unnecessary to consider whether the application could be granted if witnesses,
other than the vouching witnesses, who were Philippine citizens and knew the
applicant for the time required by the statute, had testified and established the
petitioner's qualifications for admission to citizenship ; as already indicated, no
such witnesses were introduced in support of the petition.
 007 PHILIPPINE TRUST v. BOHANAN (SIAPNO) exhibit during the probate of the will; that the same was introduced as evidence
Jan. 30, 1960 | Labrador, J. | Judicial notice of Foreign Law Introduced in Evid of a motion of one of the appellants for withdrawal of a certain sum of money;
and that the other appellants do not dispute the said law.
EXECUTOR-APPELLEE: Testate of C.O. Bohanan, deceased. Philippine
Trust Co.
OPPOSITORS-APPELLANT: Magdalena C. Bohanan and Mary Lydia FACTS:
Bohanan 1. Appeal against an order of CFI Manila, Hon. San Jose, presiding, dismissing
the objections filed by Magdalena C. Bohanan (divorced wife), Mary
SUMMARY: Decedent Bohanan was a US citizen (Nevada). Nevada law Bohanan and Edward Bohanan (children) to the project of partition submitted
allows atestator to dispose of all his property according to his will. His ex-wife by the executor and approving the said project.
and children oppose the project of partition filed by the executor-petitioner, 2. On April 24, 1950, the CFI of Manila, Hon. Amparo, presiding, admitted to
saying they were deprived of their legitimes. According to them, Philippine law probate a last will and testament of C. O. Bohanan, executed by him on April
must prevail, requiring decedent to reserve the legitime for surviving spouse 23, 1944 in Manila. In the said order, the court made the following findings:
and children. First issue: WON Magdalena was entitled to a legitime as surviving a. According to the evidence of the opponents the testator was born in
spouse – No there is no right to share in the inheritance in favor of a divorced Nebraska and therefore a citizen of that state, or at least a citizen of
wife in the state of Nevada. California where some of his properties are located. This contention in
untenable. Notwithstanding the long residence of the decedent in the
WON the testementary dispositions for the children which are short of the Philippines, his stay here was merely temporary, and he continued and
legitime given them by the Civil Code of the Philippines, are valid – Yes, since remained to be a citizen of the US and of the state of his pertinent
the laws of Nevada allow the testator to dispose of all his property according to residence to spend the rest of his days in that state.
his will, his testamentary dispositions depriving his wife and children of what b. His permanent residence or domicile in the US depended upon his
should be their legitimes. Article 10 of the old Civil Code (Article 16, new Civil personal intent or desire, and he selected Nevada as his domicile and
Code) provides that the validity of testamentary dispositions is to be governed by therefore at the time of his death, he was a citizen of that state. Nobody
the national law of the person whose succession is in question. In case at bar, the can choose his domicile or permanent residence for him. That is his
testator was a citizen of the State of Nevada. Since the laws of said state allow exclusive personal right.
the testator to dispose of all his property according to his will, his testamentary 3. Wherefore, the court finds that C. O. Bohanan was at the time of his death a
dispositions depriving his wife and children of what should be their legitimes US citizen and of the State of Nevada and declares that his will and testament
under the laws of the Philippines, should be respected and the project of partition is fully in accordance with the laws of the state of Nevada and admits the
made in accordance with his testamentary dispositions should be approved. It is same to probate.
not disputed that the laws of Nevada allow a testator to dispose of all his 4. Accordingly, the Philippine Trust Company, named as the executor of the
properties by will. It does not appear that at time of the hearing of the project will, is hereby appointed to such executor and upon the filing of a bond in the
of partition, the above-quoted provision was introduced in evidence, as it was sum of P10,000.00, let letters testamentary be issued and after taking the
the executor's duly to do. The law of Nevada, being a foreign law can only be prescribed oath, it may enter upon the execution and performance of its trust.
proved in our courts in the form and manner provided for by our Rules. However, 5. It does not appear that the order granting probate was ever questioned on
SC consulted the records of the case in the court below and found that during appeal. The executor filed a project of partition dated January 24, 1956,
the hearing on October 4, 1954 of the motion of Magdalena for withdrawal making, in accordance with the provisions of the will, the following
of 20k as her share, the foreign law, especially Section 9905, Compiled adjudications:
Nevada Laws. was introduced in evidence by Magdalena’s counsel as a. one-half of the residuary estate, to the Farmers and Merchants
Exhibits "2". National Bank of L.A., California, U.S.A. in trust only for the
benefit of testator's grandson Edward George Bohanan, which
DOCTRINE: The pertinent law of the state of the testator may be taken judicial consists of several mining companies;
notice of without proof of such law having been offered at the hearing of the b. the other half of the residuary estate to the testator's brother, F.L.
project of partition where it appears that said law was admitted by the court as Bohanan, and his sister, Mrs. M. B. Galbraith, share and share alike.
 This consist in the same amount of cash and of shares of mining Filipino wife Magdalena, and that said divorce should be declared a nullity
stock similar to those given to testator's grandson; in this jurisdiction, citing the case of Querubin vs.Querubin.
c. legacies of P6,000 each to his (testator) son, Edward Gilbert 2. The court below refused to recognize the claim of the widow on the ground
Bohana, and his daughter, Mary Lydia Bohanan, to be paid in three that the laws of Nevada, of which the deceased was a citizen, allow him to
yearly installments; dispose of all of his properties without requiring him to leave any portion of
d. legacies to Clara Daen, in the amount of P10,000.00; Katherine his estate to his wife.
Woodward, P2,000; Beulah Fox, P4,000; and Elizabeth Hastings, 3. Section 9905 of Nevada Compiled Laws of 1925 provides: Every person over
P2,000; the age of eighteen years, of sound mind, may, by last will, dispose of all his
6. It will be seen from the above that out of the total estate (minus administration or her estate, real and personal, the same being chargeable with the payment
expenses) of P211,639.33 in cash, the testator gave his grandson P90,819.67 of the testator's debts.
and one-half of all shares of stock of several mining companies and to his 4. Besides, the right of the former wife of the testator, Magdalena, to a share in
brother and sister the same amount. To his children he gave a legacy of only the testator's estate had already been passed upon adversely against her in an
P6,000 each, or a total of P12,000. order by the CFI (in 1995), which had become final, as Magdalena does not
7. The wife Magadalena C. Bohanan and her two children question the validity appear to have appealed therefrom to question its validity.
of the testamentary provisions disposing of the estate in the manner above 5. On December 16, 1953 Magdalena filed a motion to withdraw the sum of
indicated, claiming that they have been deprived of the legitimate that the P20,000 from the funds of the estate, chargeable against her share in the
laws of the form concede to them. conjugal property and the court in its said error found that there exists no
8. The most important issue is the claim of the testator's children, Edward and community property owned by the decedent and his former wife at the time
Mary Lydia, who had received legacies in the amount of P6,000 each only, the decree of divorce was issued. As already and Magdalena may no longer
and, therefore, have not been given their shares in the estate which, in question the fact that there was no community property acquired by the
accordance with the laws of the forum, should be two-thirds of the estate left testator and Magdalena during their converture.
by the testator. 6. Moreover, the court below had found that the testator and Magdalena were
married on January 30, 1909, and that divorce was granted to him on May
ISSUE/s: 20, 1922; that sometime in 1925, Magdalena C. Bohanan married Carl Aaron
1. WON Magdalena was entitled to a legitime as surviving spouse – No there is and this marriage was subsisting at the time of the death of the testator. Since
no right to share in the inheritance in favor of a divorced wife in the state of no right to share in the inheritance in favor of a divorced wife exists in the
Nevada State of Nevada and since the court below had already found that there was
2. WON the testementary dispositions for the children which are short of the no conjugal property between the testator and Magdalena C. Bohanan, the
legitime given them by the Civil Code of the Philippines, are valid – Yes, latter can now have no longer claim to pay portion of the estate left by the
since the laws of Nevada allow the testator to dispose of all his property testator.
according to his will, his testamentary dispositions depriving his wife and
children of what should be their legitimes Children
1. The old Civil Code, which is applicable to this case because the testator died
RULING: The order of the court approving the project of partition made in in 1944, expressly provides that successional rights to personal property are
accordance with the testamentary provisions, must be, as it is hereby affirmed, with to be earned by the national law of the person whose succession is in question.
costs against appellants. 2. Says the law on this point: Nevertheless, legal and testamentary successions,
in respect to the order of succession as well as to the extent of the successional
RATIO: rights and the intrinsic validity of their provisions, shall be regulated by the
Divorced wife no right to legitime national law of the person whose succession is in question, whatever may be
1. The first question refers to the share that the wife of the testator, Magdalena the nature of the property and the country in which it is found. (par. 2, Art.
C. Bohanan, should be entitled to received. The will has not given her any 10, old Civil Code, which is the same as par. 2 Art. 16, new Civil Code.)
share in the estate left by the testator. It is argued that it was error for the trial 3. In the proceedings for the probate of the will, it was found out and it was
court to have recognized the Reno divorce secured by the testator from his decided that the testator was a citizen of the State of Nevada because he had
selected this as his domicile and his permanent residence.
4. It is not disputed that the laws of Nevada allow a testator to dispose of all his
properties by will. It does not appear that at time of the hearing of the
project of partition, the above-quoted provision was introduced in
evidence, as it was the executor's duly to do. The law of Nevada, being a
foreign law can only be proved in our courts in the form and manner provided
for by our Rules, which are as follows:
SEC. 41. Proof of public or official record. — An official record or an entry
therein, when admissible for any purpose, may be evidenced by an official
publication thereof or by a copy tested by the officer having the legal custody
of he record, or by his deputy, and accompanied, if the record is not kept in
the Philippines, with a certificate that such officer has the custody (Rule 123).
5. We have, however, consulted the records of the case in the court below
and we have found that during the hearing on October 4, 1954 of the
motion of Magdalena for withdrawal of P20,000 as her share, the foreign
law, especially Section 9905, Compiled Nevada Laws. was introduced in
evidence by Magdalena’s counsel as Exhibits "2". Again said laws
presented by the counsel for the executor and admitted by the Court as Exhibit
"B" during the hearing of the case on January 23, 1950 before Judge Amparo
6. In addition, the other appellants, children of the testator, do not dispute the
above-quoted provision of the laws of the State of Nevada. Under all the
above circumstances, we are constrained to hold that the pertinent law of
Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925,
can be taken judicial notice of by us, without proof of such law having
been offered at the hearing of the project of partition.
7. Article 10 of the old Civil Code (Article 16, new Civil Code) provides that
the validity of testamentary dispositions is to be governed by the national law
of the person whose succession is in question. In case at bar, the testator was
a citizen of the State of Nevada. Since the laws of said state allow the testator
to dispose of all his property according to his will, his testamentary
dispositions depriving his wife and children of what should be their legitimes
under the laws of the Philippines, should be respected and the project of
partition made in accordance with his testamentary dispositions should be
approved.
 008 CARABALLO v. REPUBLIC (TIMBOL)
April 25, 1962 | Padilla, J. | Adoption by Non-Resident Alien FACTS:
10. Ricardo R. Caraballo, (32 y/o) an American citizen enlisted in the US Air
Force as staff sergeant detailed in Clark Field, Angeles Pampanga, where he
PETITIONER: In the Matter of the Adoption of the Minor Norma Lee Caber,
and his wife Graciela G. Carabello live (for the last 25 months; that after
Ricardo R. Caraballo
retirement, he intends to settle down permanently in the PH where he will
RESPONDENTS: Republic of the Philippines
engage int eh tourist business by putting up a hotel), alleges in a verified
petition that
SUMMARY: Ricardo Caraballo, an American citizen who is a staff sergeant
k. He and his wife have no legitimated, acknowledged natural children,
assigned in Clark, Pampanga, filed with the CFI of Pampanga a verified petition
natural children by legal fiction or any other descendant;
for the adoption of Norma Lee Caber, a 5-day old natural daughter of Mercedes
l. That with his wife’s written consent, he desires to adopt as his child
Caber. Caraballo alleged in his petition that he and his wife have no other
Norma Lee Caber, a 5 day old natural daughter of Mercedes J. Caber
children, that the consent of Graciela (wife) has been obtained, that Mercedes
begotten by an unknown father, who gave her consent to the
(natural mother of Norma) gave her consent to the same, that Caraballo had reared
adoption in a sworn statement;
and took care of Norma since the day after she had been begotten, and that
m. That since the day following her birth, Norma Lee Caber has been
Caraballo had not been convicted of any crime involving moral turpitude. The
reared and cared for by him and his wife who have developed love
Provincial Fiscal, however, filed a motion to dismiss the petition on the ground
and affection for her;
that it no cause of action and Caraballo is not qualified to adopt. The Court
n. That he never has been convicted of any crime involving moral
found however that it is in the best interest of the child to be under the care and
turpitude;
custody of Caraballo. Hence the issue at hand.
o. That financially and morally he is able to support, bring up and
educate the child; and
Whether or not Caraballo under the laws of the PH is qualified to adopt.
p. Prays that after notice, publication and hearing Norma Lee Caber be
declared his child for all intents and purposes, free from any
The SC held in the negative. Art. 335 of the Civil Code enumerates those who
obligation of obedience and maintenance with respect to her natural
cannot adopt (doctrine). Caraballo, an American citizen, who is only residing in
mother Mercedes J. Caber
the PH because of his assignment as a staff sergeant, thus only temporary, is
11. The Court ordered the verified petition filed by Carabello to be published and
considered a non-resident alien, which is disqualified under clause 4 of Art. 335.
was published in the Daily Mirror once a week for 3 consecutive weeks
The Court also mentioned that looking after the welfare of a minor, the law has
setting the petition for hearing
provided safeguards, one of which is that the adopted minor may not be removed
q. As at the hearing, nobody appeared to object to the petition for
from the country by the adopter who is not a resident of the PH, and be placed
adoption, Caraballo’s counsel prayed for an order of default, which
beyond the reach and protection of the country of the child
was entered against all interest parties, except the Sol Gen or
Provincial Fiscal who, according to the Court must appear in
DOCTRINE: The following cannot adopt –
adoption cases
1. Those who have legitimate, legitimated, acknowledged natural children,
12. The Provincial and Asst. Provincial Fiscal of Pampanga moved for the
or natural children by legal fiction;
dismissal of the petition for adoption on the ground that it states no cause of
2. The guardian, with respect to the ward, before the final approval of his
action and that Caraballo, being a non-resident alien, is not qualified to adopt
accounts;
13. The Court found that:
3. A married person, without the consent of the other spouse; r. PREMISES CONSIDERED, the Court believes that it would be to the best interest
4. Non-resident aliens; of the child to be placed under the care and custody of petitioner (Caraballo) who is
5. Resident aliens with whose government the Republic of the Philippines materially and morally able to educate and bring her up properly and adequately, and,
has broken diplomatic relations; therefore, adjudges that henceforth Norma Lee Caber shall be, for all legitimate
6. Any person who has been convicted of a crime involving moral intents and purposes, the child of Ricardo R. Caraballo and shall be freed from all
turpitude, when the penalty imposed was six months’ imprisonment or legal obligations of obedience and maintenance with respect to her natural mother,
more Mercedes Caber, and that her surname shall be changed to that of petitioner
(Caraballo), and pursuant to Article 346 of the Civil Code of the Philippines, this
 decision shall be recorded in the local civil registry of Angeles, Pampanga, and the make him a resident of the place
name and surname of the said minor shall thereafter be Norma Lee Caraballo. 36. Looking after the welfare of a minor to be adopted the law has surrounded
him with safeguards to achieve and insure such welfare
ISSUE/s: 37. It cannot be gainsaid that an adopted minor may be removed from the country
10. WoN under the law Caraballo is a person qualified to adopt – NO. Caraballo, by the adopter, who is not a resident of the Philippines, and placed beyond
an American citizen, who is only residing in the PH because of his assignment the reach and protection of the country of his birth
as a staff sergeant, thus only temporary, is considered a non-resident alien, 38. Ricardo R. Caraballo, the petitioner, an American citizen who now lives
which is disqualified under clause 4 of Art. 335.
in Clark Field, municipality of Angeles, province of Pampanga, Republic
RULING: The decree appealed from is set aside and the petition dismissed, without of the Philippines, because of his assignment as staff sergeant in the
pronouncement as to costs. United States Air Force — his stay in the Philippines then being
temporary — is a nonresident alien who, pursuant to clause 4 of the
RATIO: above quoted article of the Civil Code, is disqualified to adopt a child in
30. The Government contends that Caraballo is not qualified to adopt, invoking the Philippines.
the provisions of Art. 335 of the Civil Code, which states:
a. The following cannot adopt –
i. Those who have legitimate, legitimated, acknowledged
natural children, or natural children by legal fiction;
ii. The guardian, with respect to the ward, before the final
approval of his accounts;
iii. A married person, without the consent of the other spouse;
iv. Non-resident aliens;
v. Resident aliens with whose government the Republic fo the
Philippines has broken diplomatic relations;
vi. Any person who has been convicted of a crime involving
moral turpitude, when the penalty imposed was six
months’ imprisonment or more
31. A person is deemed a resident of a place in a country or state where he has
his abode and lives there permanently
a. It is a place chosen by him freely and voluntarily, although he may
later on change his mind and live elsewhere
32. A place in a country or state where he lives and stays permanently and to
which he intends to return after a temporary absence, no matter how long, is
his domicile
33. A sojourn such as a tourist though actually present at a place of his free choice
cannot be deemed a resident of that place
34. A foreigner who has a business or interest therein or property located in a
country or state and goes and stays in that country or state to look after his
business or property or to check up the manner or way his business or
property is being conducted or run by his manager but does not intend to
remain in the country indefinitely cannot be deemed a resident of such
country
35. Actual or physical presence or stay of a person in a place, not of his free and
voluntary choice and without intent to remain there indefinitely, does not
 009 AZNAR v. CHRISTENSEN-GARCIA (SIAPNO edited by CHIQUI) FACTS:
January 31, 1963 | Labrador, J. | Personal Law, Nationality, Domicile 11. Edward Christensen, born in New York, migrated to California where he
resided and consequently was considered citizen thereof. He came to the
PETITIONER: IN THE MATTER OF THE TESTATE ESTATE OF Philippines where he became a domiciliary until the time of his death.
EDWARD E. CHRISTENSEN, DECEASED. ADOLFO C. AZNAR, Executor However, during the entire period of his residence in this country, he had
and LUCY CHRISTENSEN, Heir of the deceased always considered himself a citizen of California.
RESPONDENTS: HELEN CHRISTENSEN GARCIA 12. In his will, Edward instituted his daughter Maria Lucy Christensen as his
only heir, but left a legacy of P3600 in favor of Helen Christensen Garcia
SUMMARY: Edward Christensen was born in New York but he migrated to who, in his will was described as "not in any way related to" him.
California where he resided for a period of 9 years. He came to the Philippines 13. It is in accordance with the provisions in his will that the executor in his final
where he became a domiciliary until his death. In his will, he declared to have account and project of partition ratified the payment of only P3,600 to Helen
only one child (natural daughter) Maria Lucy Christensen as his only heir. Christensen Garcia and proposed that the residue of the estate be transferred
However, he left a sum of money in favor of Helen Christensen Garcia, an to his daughter, Maria Lucy Christensen.
acknowledged natural child, though not in any way related to the deceased. Helen 14. But in a separate decision, the Supreme Court declared Helen as an
claims that under Article 16 of the Civil Code, California law should be applied acknowledged natural daughter of Edward. Thus, Helen alleged the legal
since testamentary provisions should be governed by the national law of the grounds of opposition are (a) that the distribution should be governed by the
deceased. However, Article 946 of the Civil Code of California states that “If laws of the Philippines, and (b) that said order of distribution is contrary
there is no law to the contrary, in the place where personal property is situated, it thereto insofar as it denies to Helen Christensen, one of two acknowledged
is deemed to follow the person of its owner, and is governed by the law of his natural children, one-half of the estate in full ownership.
domicile.” a. She said that law that should govern the estate of the deceased
Christensen should not be the internal law of California alone, but
W/N California law should apply in the testamentary succession – NO, because the entire law thereof because several foreign elements are involved,
Art. 946 of California law returns the question of law to the testator’s domicile. that the forum is the Philippines and even if the case were decided
SC was convinced that the deceased was a citizen of US but his domicile was the in California, Section 946 of the California Civil Code, which
Philippines. (doctrine) The national law mentioned in Article 16 of our Civil requires that the domicile of the decedent should apply, should be
Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, applicable.
which authorizes the reference or return of the question to the law of the testator's b. It was also alleged that she having been declared an acknowledged
domicile. The conflict of laws rule in California, Article 946, Civil Code, natural child of the decedent, she is deemed for all purposes
precisely refers back the case, when a decedent is not domiciled in California, to legitimate from the time of her birth.
the law of his domicile, which is the Philippines in the case at bar. The Philippine 15. She claims that under Art. 16 of the Civil Code, the California law should
court therefore must apply its own law as directed in the conflict of laws rule of be applied, and the question of the validity of the testamentary provision
the state of the decedent. should thus be referred back to the law of the decedent’s domicile, which
is the Philippines.
DOCTRINE: The laws of California have prescribed two sets of laws for its 16. She invokes the provisions of Article 946 of the Civil Code of California,
citizens, one for residents therein and another for those domiciled in other which is as follows: “If there is no law to the contrary, in the place where
jurisdictions. Article 946 of the California Civil Code is its conflict of laws rule, personal property is situated, it is deemed to follow the person of its
while the rule applied in Kaufman, is its internal law. If the law on succession and owner, and is governed by the law of his domicile.” Accordingly, her share
the conflict of laws rules of California are to be enforced jointly, each in its own must be increased in view of successional rights of illegitimate children under
intended and appropriate sphere, the principle cited in Kaufman should apply to Philippine laws.
citizens living in the State, but Article 946 should apply to such of its citizens as 17. On the other hand, the executor and Lucy argue that the national law of the
are not domiciled in California but in other jurisdictions. deceased must apply, and thus the courts must apply internal law of
California on the matter. Under California law, there are no compulsory
heirs and consequently a testator may dispose of his property by will in
 the form and manner he desires (Kaufman). The court below decided in provisions, shall be regulated by the national law of the person
their favor since the deceased was a citizen of the US and of the state of whose succession is under consideration, whatever may be the
California at the time of his death. nature of the property and regardless of the country where
said property may be found.
ISSUE/s: W/N California law should apply in the testamentary succession – NO, 29. There is no single American law governing the validity of testamentary
because Art. 946 of California law returns the question of law to the testator’s provisions in the United States, each state of the Union having its own private
domicile. law applicable to its citizens only and in force only within the state. The
“national law” indicated in Article 16 of the Civil Code above quoted can not,
RULING: WHEREFORE, the decision appealed from is hereby reversed and the case therefore, possibly mean or apply to any general American law. So it can refer
returned to the lower court with instructions that the partition be made as the Philippine to no other than the private law of the State of California.
law on succession provides. Judgment reversed, with costs against appellees 30. The laws of California have prescribed two sets of laws for its citizens,
one for residents therein and another for those domiciled in other
RATIO: jurisdictions. Article 946 of the California Civil Code is its conflict of
Edward was a US Citizen but his domicile is the Philippines at the time of his death
laws rule, while the rule applied in Kaufman, is its internal law. If the
26. In arriving at the conclusion that the domicile of the deceased is the
law on succession and the conflict of laws rules of California are to be
Philippines, SC was persuaded by the fact that he was born in New York,
enforced jointly, each in its own intended and appropriate sphere, the
migrated to California and resided there for nine years, and since he
came to the Philippines in 1913 he returned to California very rarely and principle cited in Kaufman should apply to citizens living in the State,
only for short visits (perhaps to relatives), and considering that he but Article 946 should apply to such of its citizens as are not domiciled
appears never to have owned or acquired a home or properties in that in California but in other jurisdictions.
state, which would indicate that he would ultimately abandon the 31. The national law mentioned in Article 16 of our Civil Code is the law on
Philippines and make home in the State of California. conflict of laws in the California Civil Code, i.e., Article 946, which
a. Residence is a term used with many shades of meaning from mere authorizes the reference or return of the question to the law of the
temporary presence to the most permanent abode. Generally, testator's domicile. The conflict of laws rule in California, Article 946, Civil
however, it is used to denote something more than mere physical Code, precisely refers back the case, when a decedent is not domiciled in
presence. (Sec. 16, Goodrich on Conflict of Laws) California, to the law of his domicile, which is the Philippines in the case
27. As to his citizenship, however, SC found that the citizenship that he at bar.
acquired in California when he resided in Sacramento, California from 32. Lucy argues that Art 16 of the Civil Code of the Philippines pointed out as
1904 to 1913, was never lost by his stay in the Philippines, for the latter the national law is the internal law of California
was a territory of the United States (not a state) until 1946 and the a. The laws of California have prescribed two sets of laws for its
deceased appears to have considered himself as a citizen of California by citizens, one for residents therein and another for those domiciled in
the fact that when he executed his will in 1951 he declared that he was a other jurisdictions. Reason demands that SC should enforce the
citizen of that State; so that he appears never to have intended to California internal law prescribed for its citizens residing therein,
abandon his California citizenship by acquiring another. and enforce the conflict of laws rules for the citizens domiciled
abroad.
Philippine law governs 33. Lucy also argued that “if there is no law to the contrary in the place where
28. The law that governs the validity of his testamentary dispositions is defined the property is situated” in Sec. 946 of the California Civil Code refers to
in Article 16 of the Civil Code of the Philippines, which is as follows: Article 16 of the Civil Code of the Philippines and that the law to the contrary
a. ART. 16. Real property as well as personal property is subject to the in the Philippines is the provision in said Article 16 that the national law of
law of the country where it is situated. the deceased should govern.
However, intestate and testamentary successions, both with a. This contention cannot be sustained. As explained in the various
respect to the order of succession and to the amount of authorities cited above the national law mentioned in Article 16 of
successional rights and to the intrinsic validity of testamentary our Civil Code is the law on conflict of laws in the California Civil
Code, i.e., Article 946, which authorizes the reference or return of
 the question to the law of the testator’s domicile. The conflict of cited by appellees to support the decision can not possibly apply in the case
laws rule in California, Article 946, Civil Code, precisely refers at bar, for two important reasons, i.e., the subject in each case does not appear
back the case, when a decedent is not domiciled in California, to the to be a citizen of a state in the United States but with domicile in the
law of his domicile, the Philippines in the case at bar. The court of Philippines, and it does not appear in each case that there exists in the state
the domicile cannot and should not refer the case back to California; of which the subject is a citizen, a law similar to or identical with Art. 946 of
such action would leave the issue incapable of determination the California Civil Code.
because the case will then be like a football, tossed back and forth
between the two states, between the country of which the decedent
was a citizen and the country of his domicile.
34. The Philippine court therefore must apply its own law as directed in the
conflict of laws rule of the state of the decedent.

RENVOI DOCTRINE:

a. Assume (1) that this question arises in a Massachusetts court. There the rule
of the conflict of laws as to intestate succession to movables calls for an
application of the law of the deceased's last domicile. Since by hypothesis X's
last domicile was France, the natural thing for the Massachusetts court to do
would be to turn to French statute of distributions, or whatever corresponds
thereto in French law, and decree a distribution accordingly.
b. An examination of French law, however, would show that if a French court
were called upon to determine how this property should be distributed, it
would refer the distribution to the national law of the deceased, thus applying
the Massachusetts statute of distributions. So on the surface of things the
Massachusetts court has open to it alternative course of action: (a) either to
apply the French law is to intestate succession, or (b) to resolve itself into a
French court and apply the Massachusetts statute of distributions, on the
assumption that this is what a French court would do.
c. If it accepts the so-called renvoi doctrine, it will follow the latter course, thus
applying its own law. This is one type of renvoi. A jural matter is presented
which the conflict-of-laws rule of the forum refers to a foreign law, the
conflict-of-laws rule of which, in turn, refers the matter back again to the law
of the forum. This is renvoi in the narrower sense. The German term for this
judicial process is 'Ruckverweisung.'
d. Another theory, known as the "doctrine of renvoi", has been advanced. The
theory of the doctrine of renvoi is that the court of the forum, in determining
the question before it, must take into account the whole law of the other
jurisdiction, but also its rules as to conflict of laws, and then apply the law to
the actual question which the rules of the other jurisdiction prescribe. This
may be the law of the forum.
35. The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs.
Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton
vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.)
 010 Lao Chay v. Galang (Valle) 11. Galang, the Commissioner of Immigration, granted the petition as far as Lao
30 Oct 1964| regala, J. | Personal law, nationality, and domicile Chay and the three children were concerned but denied Ng’s on the ground
that she is not qualified to acquire Philippine citizenship of her husband under
PETITIONER: Lao Chay and Ng Siu Luan alias Nang Siu Luan par 1 sec 15 of Commonwealth Act No. 47358, as she lacks the requirements
RESPONDENTS: Hon. Emilio L. Galang in his capacity as Commissioner of provided for under par 2 of the same section.
Immigration 12. Ng was asked to leave the country on Jan 26, 1961. Galang denied a
subsequent motion for reconsideration although he gave Ng a five-day
SUMMARY: extension to arrange her departure.
Ng and her children came to stay in the Philippines and were allowed to stay until 13. To stop the deportation, Lao Chay and Ng filed a petition for mandamus and
Jan 26, 1961. When the day came that they were to depart, they asked the BOI for prohibition in the CFI of Manila and secured a writ fo preliminary injunction.
cancellation of alien certificates of registration on the basis that lao Chay (the 14. After the trial, the court granted the pettion and held that the law does not
husband of Ng) was admitted as a Philippine citizen. Galang, the Commissioner require that an alien wife should have the same qualifications as those
of Immigration, granted the petition for the children but denied Ng’s. Galang says required for applicants for naturalization, it was enough that she is not
that she is not qualified to acquire citizenship of her husband as she lacks otherwise disqualified.
requirements.
The issue is whether or not Ng, as a wife of Lao Chay who obtained Philippine ISSUE/s:
citizenship, would automatically follow the citizenship of Lao Chay if not 12. WoN the wife of a Chinese who obtained papers of Philippine citizenship
otherwise disqualified. automatically follows the citizenship of her husband if not otherwise
The SC said NO. Since Ng Siu Luan admittedly does not possess the qualifications disqualified under the Naturalization Law – NO because an alien woman,
for naturalization, her marriage to Lao Chay is deemed as automatically vesting who is married to a citizen of the Philippines acquires the citizenship of her
in her Filipino citizenship. husband only if he has all the qualifications prescribed in Section 2 and none
of the disqualifications provided in Section 4 of the law. Since Ng Siu Luan
DOCTRINE: admittedly does not possess the qualifications for naturalization, her marriage
An alien woman, who is married to a citizen of the Philippines acquires the to Lao Chay is deemed as automatically vesting in her Filipino citizenship.
citizenship of her husband only if he has all the qualifications prescribed in
Section 2 and none of the disqualifications provided in Section 4 of the law. RULING: WHEREFORE, the decision appealed from is reversed and the writ of
Note: this is all that’s in the case. preliminary injunction is dissolved, without pronouncement as to costs.
RATIO:
15. Sec. 15 provides in part: Effect of the naturalization on wife and Any woman
FACTS: who is now or may here-after be married to a citizen of the Philippines, and
10. Ng Siu Luan (Ng) and her three children, who are all minors, came to the who might herself be lawfully naturalized, shall be deemed a citizen of the
Philippines on 19 Jan 1960 as temporary visitors. They were allowed to stay Philippines.
until Jan 26, 1961. But instead of departing by that date, they asked the 16. It is now settled that under this provision, an alien woman, who is married
Bureau of Immigration (BOI) for the cancellation of alien certificates of to a citizen of the Philippines acquires the citizenship of her husband only
registration as well as those of the children on the basis that Lao Chay’s if he has all the qualifications prescribed in Section 2 and none of the
admission to Philippine citizenship on Dec 12 1960. disqualifications provided in Section 459 of the law. Since Ng Siu Luan

58
Sec. 15. Effect of the naturalization on wife and children.—Any woman who is now or may A foreign-born minor child, if dwelling in the Philippines at the time of the naturalization of the
hereafter be married to a citizen of the Philippines, and who might herself be lawfully naturalized parent, shall automatically become a Philippine citizen, and a foreign-born minor child, who is
shall be deemed a citizen of the Philippines. not in the Philippines at the time the parent is naturalized, shall be deemed a Philippine citizen
only during his minority, unless he begins to reside permanently in the Philippines when still a
Minor children of persons naturalized under this law who have been born in the Philippines shall minor, in which case, he will continue to be a Philippine citizen even after becoming of age.
be considered citizens thereo

59
Section 4. Who are disqualified. - The following cannot be naturalized as Philippine citizens:
 admittedly does not possess the qualifications for naturalization, her marriage
to Lao Chay be deemed as automatically vesting in her Filipino citizenship.
17. Lao Chay claim that a difference in the citizenship of husband and wife is
subversive of family solidarity, but the SC has already said that the duty of
consorts to live together is irrelevant to the issue which concerns only the
right of a sovereign state to determine what aliens can remain within its
territory and under what conditions they can stay therein.

Persons opposed to organized government or affiliated with any association or group of persons Persons who, during the period of their residence in the Philippines, have not mingled socially
who uphold and teach doctrines opposing all organized governments; with the Filipinos, or who have not evinced a sincere desire to learn and embrace the customs,
Persons defending or teaching the necessity or propriety of violence, personal assault, or traditions, and ideals of the Filipinos;
assassination for the success and predominance of their ideas;
Citizens or subjects of nations with whom the United States 2and the Philippines are at war,
Polygamists or believers in the practice of polygamy; during the period of such war;

Persons convicted of crimes involving moral turpitude; Citizens or subjects of a foreign country other than the United States 3whose laws do not grant
Filipinos the right to become naturalized citizens or subjects thereof.
Persons suffering from mental alienation or incurable contagious diseases;
 011 ZITA NGO v. REPUBLIC (VICENCIO) The petition is also not supported by the affidavit of at least two witnesses. (See Doctrine 2).
Jan. 30, 1967 | Sanchez, J. | Naturalization Furthermore, Zita likewise failed to “set forth the names and post-office addresses of such
witnesses as the petitioner may desire to introduce at the hearing of the case.” The case was
submitted solely on the testimony of Zita. No other witnesses were presented.
IN RE: petition to declare ZITA NGO to possess all qualifications and none of the
disqualifications for naturalization under Commonwealth Act 473 for the purpose of
DOCTRINE:
cancelling her alien registry with the BUREAU OF IMMIGRATION.
1. Section 7 of the Naturalization Law requires that a petition for naturalization should state
petitioner's "present and former places of residence". Residence encompasses all places
PETITIONER: Zita Ngo Burca
where petitioner actually and physically resided.
RESPONDENTS: Republic of the Philippines
2. According to the law, the petition must also be supported by the affidavit of at least two
SUMMARY: Zita Ngo avers that she is of legal age, married to Florencio Burca, a Filipino
credible persons, “stating that they are citizens of the Philippines and personally know the
citizen, and a resident of Real St., Ormoc City; that before her marriage, she was a Chinese
petitioner to be a resident of the Philippines for the period of time required by this Act and a
citizen, subject of Nationalist China, with ACR No. A-148054; that she was born on March
person of good repute and morally irreproachable, and that said petitioner has in their
30, 1933 in Gigaquit, Surigao, and holder of Native Born Certificate of Residence No.
opinion all the qualifications necessary to become a citizen of the Philippines and is not in
46333. She petitions to be declared “as possessing all qualifications and none of the
any way disqualified under the provisions of this Act”
qualifications for naturalization under Commonwealth Act 473 for the purpose of cancelling
her Alien Registry with the Bureau of Immigration.” The Solicitor General opposed and
moved to dismiss the petition for: (1) there is not proceeding established by law for the FACTS:
judicial declaration of the citizenship of an individual, (2) petition is fatally defective for 25. Petitioner Zita Ngo was born in Gigaquit, Surigao (now Surigao del Norte), on March
failure to contain or mention the essential allegations required under Section 7 of the 30, 1933.
Naturalization Law, such as, among others, petitioner Zita's former places of residence, and 26. Her father was Ngo Tay Suy and her mother was Dee See alias Lee Co, now both
the absence of the affidavits of at least two supporting witnesses. Issue: WoN the petition for deceased and citizens of Nationalist Republic of China.
citizenship or naturalization of Zita Ngo should prosper – NO. The petition is fatally 27. She holds Native Born Certificate of Residence 46333 and Alien Certificate of
detective. Registration A-148054.
28. She married Florencio Burca a native-born Filipino, on May 14, 1961.
On the SolGen’s first contention, the Court ruled that indeed, there is no law or rule which 29. She petitions now to be declared "as possessing all qualifications and none of the
authorizes a declaration of Filipino citizenship. Citizenship is not an appropriate subject for qualifications for naturalization under Commonwealth Act 473 for the purpose of
declaratory judgment proceedings. And in one case, the SC held that citizenship of an alien cancelling her Alien Registry with the Bureau of Immigration."
woman married to a Filipino must be determined in an “appropriate proceeding.” 30. She avers that:
Specifically, the procedure in the case of an alien woman married to a Filipino who desires (1) she is of legal age, married to Florencio Burca, a Filipino citizen, and a
to be a citizen of this country should be: (See Doctrine below). resident of Real St., Ormoc City;
(2) that before her marriage, she was a Chinese citizen, subject of Nationalist
DOCTRINE: China, with ACR No. A-148054;
1. The alien woman must apply therefor by filing a petition for citizenship reciting that she (3) that she was born on March 30, 1933 in Gigaquit, Surigao, and holder of
possesses all the qualifications set forth in Section 2, and none of the disqualifications under Native Born Certificate of Residence No. 46333.
Section 4, both of the Revised Naturalization Law; 31. Notice of hearing was sent to the Solicitor General and duly published.
2. Said petition must be filed in the Court of First Instance where petitioner has resided at
32. The Solicitor General opposed and moved to dismiss the petition on two main
least one year immediately preceding the filing of the petition; and
grounds, viz:
3. Any action by any other office, agency, board or official, administrative or otherwise —
(1) that "there is no proceeding established by law, or the rules for the judicial
other than the judgment of a competent court of justice — certifying or declaring that an
declaration of the citizenship of an individual"; and
alien wife of the Filipino citizen is also a Filipino citizen, is hereby declared null and void.
(2) that as an application for Philippine citizenship, "the petition is fatally
defective for failure to contain or mention the essential allegations required
On the SolGen’s second contention, the Court ruled that first, Zita Ngo did not aver in her
under Section 7 of the Naturalization Law", such as, among others,
petition that she also resided in Cebu, where she took up a course in home economics for a
petitioner's former places of residence, and the absence of the affidavits of
year (She merely testified it). (See Dcotrine 1 below) Cebu comes within the term residence
at least two supporting witnesses.
and failure to allege a former place of residence is fatal.
33. Trial was held on December 18, 1964. Sole witness was Zita Ngo. With the
documentary evidence admitted, the case was submitted for decision.
 34. The judgment appealed from, dated December 18, 1964, reads: WHEREFORE, (d) Persons convicted of crimes involving moral turpitude', so that a
decision is hereby rendered dismissing the opposition, and declaring that ZITA NGO blackmailer, or a maintainer of gambling or bawdy houses, not
previously convicted by a competent court, would not be thereby
BURCA petitioner, has all the qualifications and none of the disqualifications to
disqualified; still, it is certain that the law did not intend such a person to
become a Filipino Citizen and that she being married to a Filipino Citizen, is hereby be admitted as a citizen in view of the requirement of section 2 that an
declared a citizen of the Philippines, after taking the necessary oath of allegiance, as applicant for citizenship 'must be of good moral character'.
soon as this decision becomes final and executory. 4. Similarly the citizen's wife might be a convinced believer in racial supremacy, in
government by certain selected classes, in the right to vote exclusively by certain
ISSUE/s: "herrenvolk", and thus disbelieve in the principles underlying the Philippine
5. WoN the petition for citizenship or naturalization of Zita Ngo should prosper – NO. Constitution;
The petition is fatally detective for failure to contain or mention the essential 5. yet she would not be disqualified under section 4, as long as she is not "opposed to
organized government", nor affiliated to groups "upholding or teaching doctrines
allegations required under Section 7 of the Naturalization Law.
opposing all organized governments", nor "defending or teaching the necessity or of
violence, personal assault or assassination for the success or predominance of their
RULING: The judgment appealed from is hereby reversed and the petition dismissed, without ideas'. Et sic de caeteris".
costs. So ordered. 37. Indeed, the political privilege of citizenship should not to any alien woman on the sole
basis of her marriage to a Filipino — "irrespective of moral character, ideological
RATIO: beliefs, and identification with Filipino ideals, customs and traditions".
31. By constitutional and legal precepts, an alien woman who marries a Filipino citizen, 38. The rule heretofore adverted to is to be observed whether the husband be a natural
does not — by the mere fact of marriage - automatically become a Filipino citizen. born Filipino, a naturalized Filipino, or a Filipino by election.
32. Thus, by Article IV of the Constitution, citizenship is limited to: 39. We next go to the mechanics of implementation of the constitutional and legal
1. Those who are citizens of the Philippine Islands at the time of the adoption of this provisions, as applied to an alien woman married to a Filipino. We part from the
Constitution.
premise that such an alien woman does not, by the fact of marriage, acquire Philippine
2. Those born in the Philippine Islands of foreign parents who, before the adoption of
this Constitution, had been elected to public office in the Philippine Islands. citizenship. The statute heretofore quoted (Sec. 15, Revised Naturalization Law), we
3. Those whose fathers are citizens of the Philippines. repeat, recites that she "shall be deemed a citizen of the Philippines" if she "might
4. Those whose mothers are citizens of the Philippines and, upon reaching the age of herself be lawfully naturalized".
majority, elect Philippine citizenship. 40. How then shall she be "deemed" a citizen of the Philippines? An examination of the
5. Those who are naturalized in accordance with law. Revised Naturalization Law is quite revealing.
33. And, on the specific legal status of an alien woman married to a citizen of the 41. For instance, minor children of persons naturalized under the law who were born in
Philippines, Congress in paragraph 1, Section 15 of the Revised Naturalization Law the Philippines "shall be considered citizens thereof". Similarly, a foreign-born minor
legislated the following: child, if dwelling in the Philippines at the time of the naturalization of the parents,
1. Any woman who is now or may hereafter be married to a citizen of the "shall automatically become a Filipino citizen".
Philippines, and who might herself be lawfully naturalized shall be deemed 42. No conditions are exacted; citizenship of said minor children is conferred by the law
a citizen of the Philippines. itself, without further proceedings and as a matter of course.
34. Jurisprudence has since stabilized the import of the constitutional and statutory 43. An alien wife of a Filipino does not fit into either of the categories just mentioned.
precepts just quoted with a uniform pronouncement that an alien wife of a Filipino Legal action has to be taken to make her a citizen.
citizen may not acquire the status of a citizen of the Philippines unless there is 44. There is no law or rule which authorizes a declaration of Filipino
proof that she herself may be lawfully naturalized. citizenship. Citizenship is not an appropriate subject for declaratory judgment
35. Which means that, in line with the national policy of selective admission to Philippine proceedings. And in one case, we held that citizenship of an alien woman married
citizenship, the wife must possess the qualifications under Section 2, and must not to a Filipino must be determined in an "appropriate proceeding".
be laboring under any of the disqualifications enumerated in Section 4, of the 45. Speculations arise as to the import of the term "appropriate proceeding". The record
Revised Naturalization Law. of this case disclose that, in some quarters, opinion is advanced that the determination
36. This Court, in Ly Giok Ha, et al. vs. Galang, et al., L-21332, March 18,1966, explains of whether an alien woman married to a Filipino shall be deemed a Filipino citizen,
the reasons for the rule in this wise: may be made by the Commissioner of Immigration.
1. Reflection will reveal why this must be so. The qualifications prescribed under 46. Conceivably, absence of clear legal direction on the matter could have given rise to
section 2 of the Naturalization Act, and the disqualifications enumerated in its section divergence of views. We should aim at drying up sources of doubt. Parties interested
4, are not mutually exclusive;
should not be enmeshed in jurisdictional entanglements. Public policy and sound
2. And if all that were to be required is that the wife of a Filipino be not disqualified
under section 4, the result might well be that citizenship would be conferred upon practice, therefore, suggest that a clear-cut ruling be made on this subject.
persons in violation of the policy of the statute. 47. If an alien woman married to a Filipino does not become ipso facto a citizen, then
3. For example, section 4 disqualifies only: she must have to file a "petition for citizenship" in order that she may acquire the
(c) Polygamists or believers in the practice of polygamy; status of a Filipino citizen.
 48. Authority for this view is Section 7 of the Revised Naturalization Law in which former places of residence is that "information regarding petitioner and
the plain language is: "Any person desiring to acquire Philippine objection to his application are apt to be provided by people in his actual,
citizenship, shall file with the competent court" a petition for the purpose. And physical surrounding".
this, because such alien woman is not a citizen, and she desires to acquire it. 58. And the State is deprived of full opportunity to make inquiries as to
49. The proper forum, Section 8 of the same law points out, is the Court of First
petitioner's fitness to become a citizen, if all the places of residence do
Instance of the province where the petitioner has resided "at least one year
immediately preceding the filing of the petition". not appear in the petition. So it is, that failure to allege a former place of
50. It is quite plain that the determination of whether said alien wife should be given the residence is fatal.
status of a citizen should fall within the area allocated to competent courts. That this 59. Furthermore, said petition is not supported by the affidavit of at least two
is so, is exemplified by the fact that this Court has taken jurisdiction in one such case credible persons, "stating that they are citizens of the Philippines and
originating from the court of first instance, where an alien woman had directly sought personally know the petitioner to be a resident of the Philippines for the
naturalization in her favor. period of time required by this Act and a person of good repute and
51. And, as nothing in the Revised Naturalization Law empowers any other office, morally irreproachable, and that said petitioner has in their opinion all
agency, board or official, to determine such question, we are persuaded to say that the qualifications necessary to become a citizen of the Philippines and is
resolution thereof rests exclusively with the competent courts.
52. We accordingly rule that:
not in any way disqualified under the provisions of this Act".
1. An alien woman married to a Filipino who desires to be a citizen of this 60. Petitioner Zita likewise failed to "set forth the names and post-office
country must apply therefor by filing a petition for citizenship reciting addresses of such witnesses as the petitioner may desire to introduce at
that she possesses all the qualifications set forth in Section 2, and none the hearing of the case".
of the disqualifications under Section 4, both of the Revised 61. The necessity for the affidavit of two witnesses cannot be overlooked. It is
Naturalization Law; important to know who those witnesses are. The State should not be denied
2. Said petition must be filed in the Court of First Instance where the opportunity to check on their background to ascertain whether they are of
petitioner has resided at least one year immediately preceding the filing good standing in the community, whose word may be taken on its face value,
of the petition; and and who could serve as "good warranty of the worthiness of the petitioner".
3. Any action by any other office, agency, board or official, administrative
62. These witnesses should indeed prove in court that they are reliable insurers
or otherwise — other than the judgment of a competent court of justice
— certifying or declaring that an alien wife of the Filipino citizen is also of the character of petitioner. Short of this, the petition must fail.
a Filipino citizen, is hereby declared null and void. 63. Here, the case was submitted solely on the testimony of the petitioner Zita
53. We treat the present petition as one for naturalization. Or, in the words Ngo. No other witnesses were presented. This does not meet with the legal
of law, a "petition for citizenship". This is as it should be. Because a requirement.
reading of the petition will reveal at once that efforts were made to set forth
therein, and to prove afterwards, compliance with Sections 2 and 4 of the
Revised Naturalization Law.
54. The trial court itself apparently considered the petition as one for
naturalization, and, in fact, declared petition "a citizen of the Philippines."

Merits of the petition

55. We note that the Zita Ngo avers that she was born in Gigaquit, Surigao that
her former residence was Surigao, Surigao, and that presently she is residing
at Regal St., Ormoc City. In court, however, she testified that she also resided
in Junquera St., Cebu, where she took up a course in home economics, for
one year.
56. Section 7 of the Naturalization Law requires that a petition for naturalization
should state petitioner's "present and former places of residence". Residence
encompasses all places where petitioner actually and physically resided.
57. Cebu, where she studied for one year, perforce comes within the term
residence. The reason for exacting recital in the petition of present and
 MOY YA LIM YAO v. COI (Salve) Constitution). Citizens by naturalization, under this provision, include not only those
October 4, 1971 | Barredo, J. | Nationality who are naturalized in accordance with legal proceedings for the acquisition of
citizenship, but also those who acquire citizenship by "derivative naturalization" or
PETITIONER: MOY YA LIM YAO alias EDILBERTO AGUINALDO LIM and by operation of law, as, for example, the "naturalization" of an alien wife through the
LAU YUEN YEUNG
 naturalization of her husband, or by marriage of an alien woman to a citizen.
RESPONDENTS: COMMISSIONER OF IMMIGRATION
FACTS:
SUMMARY: Lau Yuen Yeung applied for a passport visa to enter the Philippines 1. This is an appeal from the decision of the Court of First Instance of Manila about
as a non-immigrant. She stated that she was a Chinese residing at Kowloon, Moy Ya Lim Yao and Yeung seek the issuance of a writ of injunction against the
Hongkong, and that she desired to take a pleasure trip to the Philippines to visit her Commissioner of Immigration, "restraining the latter and/or his authorized
great (grand) uncle Lau Ching Ping for a period of one month. After repeated representative from ordering plaintiff Lau Yuen Yeung to leave the Philippines
extensions, Lau Yuen Yeung was allowed to stay in the Philippines up to February and causing her arrest and deportation and the confiscation of her bond, upon her
13, 1962. On January 25, 1962, she contracted marriage with Moy Ya Lim Yao alias failure to do so.
Edilberto Aguinaldo Lim an alleged Filipino citizen. Because of the contemplated 2. Lau Yuen Yeung applied for a passport visa to enter the Philippines as a non-
action of Commissioner of Immigration to confiscate her bond and order her arrest immigrant. She stated that she was a Chinese residing at Kowloon, Hongkong,
and immediate deportation, after the expiration of her authorized stay, she brought and that she desired to take a pleasure trip to the Philippines to visit her great
this action for injunction with preliminary injunction. CFI ruled that an alien woman (grand) uncle Lau Ching Ping for a period of one month. She was permitted to
may be deemed a citizen of the Philippines by virtue of her marriage to a Filipino come into the Philippines on March 13, 1961, and was permitted to stay for a
citizen only if she possesses all the qualifications and none of the disqualifications period of one month which would expire on April 13, 1961.
specified in the law, because these are the explicit requisites provided by law for an 3. On the date of her arrival, Asher Y, Cheng filed a bond in the amount of P1,000.00
alien to be naturalized (so a need for naturalization proceedings) and she cannot go to undertake, among others that said Lau Yuen Yeung would actually depart from
back on her representation to stay permanently without first departing from the the Philippines.
Philippines as she had promised. WoN Lan Yuen Yeung should depart the Philippine 4. After repeated extensions, Lau Yuen Yeung was allowed to stay in the Philippines
first and secure another visa overseas despited marriage with a Filipino – NO, up to February 13, 1962.
because Section 9(g) of the Immigration Act does not apply to aliens who after 5. On January 25, 1962, she contracted marriage with Moy Ya Lim Yao alias
coming into the Philippines as temporary visitors, legitimately become Filipino Edilberto Aguinaldo Lim an alleged Filipino citizen.
citizens or acquire Filipino citizenship. WoN marriage with a Filipino automatically 6. Because of the contemplated action of Commissioner of Immigration to
confer on the alien Philippine citizenship – YES, because the Court has already held confiscate her bond and order her arrest and immediate deportation, after the
that an alien thereby becomes a Filipina, if it can be proven that at the time of such expiration of her authorized stay, she brought this action for injunction with
marriage, she does not possess any of the disqualifications enumerated in Section 4 preliminary injunction.
of the Naturalization Law, without the need of submitting to any naturalization 7. At the hearing which took place one and a half years after her arrival, it was
proceedings under said law. If Section 15 of the, Revised Naturalization Law were admitted that Lau Yuen Yeung could not write either English or Tagalog. Except
to be interpreted, as this Court did, in such a way as to require that the alien for a few words, she could not speak either English or Tagalog. She could not
wife must prove the qualifications prescribed in Section 2, the privilege granted name any Filipino neighbor, with a Filipino name except one, Rosa. She did not
to alien wives would become illusory. So, no naturalization proceeding is know the names of her brothers-in-law, or sisters-in-law.
necessary. The phrases "shall be deemed" "shall be considered," and "shall 8. CFI ruled that:
automatically become" as used in the above provision, are undoubtedly synonymous. 9. First, Section 15 of the Revised Naturalization Law provides:
The leading idea or purpose of the provision was to confer Philippine citizenship by Effect of the naturalization on wife and children. — Any woman who is now or
operation of law upon certain classes of aliens as a legal consequence of their may hereafter be married to a citizen of the Philippines, and who might herself
relationship, by blood or by affinity, to persons who are already citizens of the be lawful lly naturalized shall be deemed a citizen of the Philippines.
Philippines. 10. The clause "who might herself be lawfully naturalized" incontestably implies that
DOCTRINE: The Constitution itself recognizes as Philippine citizens "Those who an alien woman may be deemed a citizen of the Philippines by virtue of her
are naturalized in accordance with law" (Section 1[5], Article IV, Philippine marriage to a Filipino citizen only if she possesses all the qualifications and none
 of the disqualifications specified in the law, because these are the explicit 66. An alien who is admitted as a non-immigrant cannot remain in the Philippines
requisites provided by law for an alien to be naturalized. permanently. To obtain permanent admission, a non-immigrant alien must depart
11. Second, it is evident that said marriage was effected merely for convenience to voluntarily to some foreign country and procure from the appropriate Philippine
defeat or avoid her then impending compulsory departure, not to say deportation. consul the proper visa and thereafter undergo examination by the officers of the
This cannot be permitted. Bureau of Immigration at a Philippine port of entry for determination of his
12. Third, she cannot go back on her representation to stay permanently without first admissibility in accordance with the requirements of this Act.
departing from the Philippines as she had promised. 67. does not apply to aliens who after coming into the Philippines as temporary
13. And fourth, Commissioner of Immigration is charged with the administration of visitors, legitimately become Filipino citizens or acquire Filipino citizenship.
all laws relating to immigration and in the performance of his duties in relation to 68. We cannot see any reason why an alien who has been here as a temporary visitor
alien immigrants, the law gives the Commissioner of Immigration a wide but who has in the meanwhile become a Filipino should be required to still leave
discretion, a quasi-judicial function in determining cases presented to him, so that the Philippines for a foreign country, only to apply thereat for a re-entry here and
his decision thereon may not be disturbed unless he acted with abuse of discretion undergo the process of showing that he is entitled to come back, when after all,
or in excess of his jurisdiction. such right has become incontestible as a necessary concomitant of his assumption
14. During the hearing in the lower court, held almost ten months after the alleged of our nationality by whatever legal means this has been conferred upon him.
marriage, "Lau Yuen Yeung was already carrying in her womb for seven months
a child by her husband." Second Issue
2. Court held in some cases that for an alien woman who marries a Filipino to be
ISSUE/s: deemed a Filipina, she has to apply for naturalization in accordance with the
64. WoN Lan Yuen Yeung should depart the Philippine first and secure another visa procedure prescribed by the Revised Naturalization Law and prove in said
overseas despited marriage with a Filipino – NO, because Section 9(g) of the naturalization proceeding not only that she has all the qualifications and none of
Immigration Act does not apply to aliens who after coming into the Philippines the disqualifications provided in the law but also that she has complied with all
as temporary visitors, legitimately become Filipino citizens or acquire Filipino the formalities required thereby like any other applicant for naturalization
citizenship. 3. Disqualifications under Section 4, Commonwealth Act 473:
1. WoN marriage with a Filipino automatically confer on the alien Philippine (a) Persons opposed to organized government or affiliated with any association
citizenship – YES, because the Court has already held that an alien thereby or group of persons who uphold and teach doctrines opposing all organized
becomes a Filipina, if it can be proven that at the time of such marriage, she does governments;
not possess any of the disqualifications enumerated in Section 4 of the (b) Persons defending or teaching the necessity or propriety of violence,
Naturalization Law, without the need of submitting to any naturalization personal assault, or assassination for the success and predominance of their
proceedings under said law. If Section 15 of the, Revised Naturalization Law ideas;
were to be interpreted, as this Court did, in such a way as to require that the (c) Polygamists or believers in the practice of polygamy;
alien wife must prove the qualifications prescribed in Section 2, the privilege (d) Persons convicted of crimes involving moral turpitude;
granted to alien wives would become illusory. So, no naturalization (e) Persons suffering from mental alienation or incurable contagious diseases;
proceeding is necessary. (f) Persons who, during the period of their residence in the Philippines, have not
RULING: IN VIEW OF ALL THE FOREGOING, the judgment of the Court a quo mingled socially with the Filipinos, or who have not evinced a sincere desire to
dismissing appellants' petition for injunction is hereby reversed and the learn and embrace the customs, traditions, and ideals of the Filipinos;
Commissioner of Immigration and/or his authorized representative is permanently (g) Citizens or subjects of nations with whom the ... Philippines are at war,
enjoined from causing the arrest and deportation and the confiscation of the bond of during the period of such war;
appellant Lau Yuen Yeung, who is hereby declared to have become a Filipino citizen (h) Citizens or subjects of a foreign country other than the United States, whose
from and by virtue of her marriage to her co-appellant Moy Ya Lim Yao alias laws does not grant Filipinos the right to become naturalized citizens or subjects
Edilberto Aguinaldo Lim, a Filipino citizen on January 25, 1962. No costs. thereof.
4. The phrase "who might herself be lawfully naturalized", as contained in the above
RATIO: provision, means that the woman who is married to a Filipino citizen must not
First Issue belong to any of the disqualified classes enumerated in Section 4 of the
65. We hereby hold that portion of Section 9 (g) of the Immigration Act providing: Naturalization Law
5. Court expressly gave the parties concerned opportunity to prove the fact that they must necessarily be in the affirmative. As already stated, however, the decision in
were not suffering from any of the disqualifications of the law without the need Burca has not yet become final because there is still pending with Us a motion for
of undergoing any judicial naturalization proceeding. its reconsideration
6. Previous court decisions stated that she thereby becomes a Filipina, if it can be 12. No doubt whatever is entertained, so Burca holds very correctly, as to the point
proven that at the time of such marriage, she does not possess any of the that the minor children, falling within the conditions of place and time of birth
disqualifications enumerated in Section 4 of the Naturalization Law, without the and residence prescribed in the provision, are vested with Philippine citizenship
need of submitting to any naturalization proceedings under said law. directly by legislative fiat or by force of the law itself and without the need for
7. with the approval of the Revised Naturalization Law (Commonwealth Act No. any judicial proceeding or declaration
473) on June 17, 1939, Congress has since discarded class or racial consideration 13. But it is claimed that the same expression "shall be deemed a citizen of the
from the qualifications of applicants for naturalization (according to its proponent, Philippines" in reference to the wife, does not necessarily connote the vesting of
the purpose in eliminating this consideration was, first, to remove the features of citizenship status upon her by legislative fiat because the antecedent phrase
the existing naturalization act which discriminated in favor of the Caucasians and requiring that she must be one "who might herself be lawfully naturalized" implies
against Asiatics who are our neighbors, and are related to us by racial affinity and, that such status is intended to attach only after she has undergone the whole
second, to foster amity with all nations process of judicial naturalization required of any person desiring to become a
8. We have examined all the leading American decisions on the subject and We have Filipino.
found no warrant for the proposition that the phrase "who might herself be 14. The Constitution itself recognizes as Philippine citizens "Those who are
lawfully naturalized" in Section 1994 of the Revised Statutes was meant solely as naturalized in accordance with law" (Section 1[5], Article IV, Philippine
a racial bar Constitution). Citizens by naturalization, under this provision, include not only
9. If Section 1560 of the, Revised Naturalization Law were to be interpreted, as those who are naturalized in accordance with legal proceedings for the acquisition
this Court did, in such a way as to require that the alien wife must prove the of citizenship, but also those who acquire citizenship by "derivative
qualifications prescribed in Section 261, the privilege granted to alien wives naturalization" or by operation of law, as, for example, the "naturalization" of an
would become illusory. So, today, no naturalization proceeding is necessary. alien wife through the naturalization of her husband, or by marriage of an alien
10. The third aspect of this case requires necessarily a re-examination of the ruling of woman to a citizen.
this Court in Burca regarding the need of judicial naturalization proceedings 15. The phrase "shall be deemed a citizen of the Philippines" found in Section 14 of
before the alien wife of a Filipino may herself be considered or deemed a Filipino. the Revised Naturalization Law clearly manifests an intent to confer citizenship.
11. May she be deemed a Filipina without submitting to a naturalization proceeding? 16. The phrases "shall be deemed" "shall be considered," and "shall automatically
Naturally, if Burca is to be followed, it is clear that the answer to this question become" as used in the above provision, are undoubtedly synonymous. The

60
SEC. 15. Effect of the naturalization on wife and children. — Any woman, who is now or may hereafter (f) citizens or subjects of nations with whom the United States and the Philippines are at war, during the
be married to a citizen of the Philippines, and who might herself be lawfully naturalized shall be deemed a period of such war.
citizen of the Philippines. Section 3. Qualifications. — The persons comprised in subsection (a) of section one of this Act, in order
Minor children of persons naturalized under this law who have been born in the Philippines shall be to be able to acquire Philippine citizenship, must be not less than twenty- one years of age on the day of
considered citizens thereof. the hearing of their petition.
A foreign-born minor child, if dwelling in the Philippines at the time of the naturalization of the parent, The persons comprised in subsections (b) and (c) of said section one shall, in addition to being not less
shall automatically become a Philippine citizen, and a foreign-born child, who is not in the Philippines at than twenty- one years of age on the day of the hearing of the petition, have all and each of the following
the time the parent is naturalized, shall be deemed a Philippine citizen only during his minority, unless he qualifications:
begins to reside permanently in the Philippines when still a minor, in which case, he will continue to be a First. Residence in the Philippine Islands for a continuous period of not less than five years, except as
Philippine citizen even after becoming of age. provided in the next following section;
A child born outside of the Philippines after the naturalization of his parent, shall be considered a Second. To have conducted themselves in a proper and irreproachable manner during the entire period of
Philippine citizen unless within one year after reaching the age of majority he fails to register himself as a their residence in the Philippine Islands, in their relation with the constituted government as well as with
Philippine citizen at the American Consulate of the country where he resides, and to take the necessary the community in which they are living;
oath of allegiance. Third. To hold in the Philippine Islands real estate worth not less than one thousand pesos, Philippine
61
Section 2. Who are disqualified. — The following cannot be naturalized as Philippine citizens: (a) currency, or have some known trade or profession; and
Persons opposed to organized government or affiliated with any association or group of persons who Fourth. To speak and write English, Spanish, or some native tongue.
uphold and teach doctrines opposing all organized government; (b) persons defending or teaching the In case the petitioner is a foreign subject, he shall, besides, declare in writing and under oath his intention
necessity or propriety of violence, personal assault or assassination for the success and predominance of of renouncing absolutely and perpetually all faith and allegiance to the foreign authority, state or
their ideas; (c) polygamists or believers in the practice of polygamy; (d) persons convicted of crimes sovereignty of which he was a native, citizen or subject.
involving moral turpitude; (e) persons suffering from mental alienation or incurable contagious diseases;
 leading idea or purpose of the provision was to confer Philippine citizenship by
operation of law upon certain classes of aliens as a legal consequence of their
relationship, by blood or by affinity, to persons who are already citizens of the
Philippines.
17. There is at least one decision of this Court before Burca wherein it seems it is
quite clearly implied that this Court is of the view that under Section 16 of the
Naturalization Law, the widow and children of an applicant for naturalization who
dies during the proceedings do not have to submit themselves to another
naturalization proceeding in order to avail of the benefits of the proceedings
involving the husband. Section 16 provides:
SEC. 16. Right of widow and children of petitioners who have died. — In case a
petitioner should die before the final decision has been rendered, his widow and
minor children may continue the proceedings. The decision rendered in the case
shall, so far as the widow and minor children are concerned, produce the same
legal effect as if it had been rendered during the life of the petitioner.
18. Everytime the citizenship of a person is material or indispensable in a judicial or
administrative case, whatever the corresponding court or administrative authority
decides therein as to such citizenship is generally not considered as res adjudicata,
hence it has to be threshed out again and again as the occasion may demand.
 013 LLORENTE v. COURT OF APPEALS (APASAN) force only within the State. It can therefore refer to no other than the law of the
November, 23, 2000 | Pardo, J. | Renvoi Doctrine
State of which the decedent was a resident (New York).
Second, there is no showing that the application of the renvoi doctrine is called
PETITIONER: Paula T. Llorente for or required by New York State law. (Read 1st doctrine)
RESPONDENTS: Court of Appeals and Alicia F. Llorente
Issue No. 2: WoN the divorce decree is valid – Yes. (read doctrine No. 2) In the
SUMMARY: The decease Lorenzo Llorente (Lorenzo) was an enlisted present case, there is no dispute that at the time of the filing for the divorce decree,
serviceman of the US Navy from 1927 to 1957. In 1937, Lorenzo married Paula Lorenzo was already a foreign citizen. Furthermore, the divorce decree had
Llorente (Paula) in Carimines Sur. After the marriage, Lorenzo departed for the already attained finality.
US and Paula stayed in the Philippines. In 1943, Lorenzo was admitted to US
Citizenship and he was issued a Certificate of Naturalization by the District Court Issue No. 3: WoN the will is valid – distinction must be made between extrinsic
of New York. In 1945, upon the liberation of the PH from the Americans, Lorenzo and intrinsic validity. (read doctrine No. 3) For the extrinsic validity, it was a fact
was granted accrued leave by the US Navy to visit his wife. However, Lorenzo in this case that the court duly admitted the probate of the will. For the intrinsic
found out that his wife was having an adulterous relationship with his brother. So validity, it must still be pleaded and proved in accordance with the foreign law of
Lorenzo returned to the US and filed for divorce decree before the Superior Court the decedent and therefore a remand is proper.
of the State of California. This was granted and the divorce decree became final.
Lorenzo returned to the PH and had his second marriage with Alicia Llorente. DOCTRINE:
Lorenzo executed a last will and testament where he bequeathed all his properties 1. The Renvoi Doctrine shall apply only when there is a law of another
to Alicia and their three children (Raul, Luz, Beverly). Subsequently, Lorenzo state providing for such application.
filed a petition for probate. Initially, this was denied by the court on the ground 2. An alien may validly obtained a divorce decree abroad, provided that it
that he was still alive but the court subsequently admitted the probate in view of is in accordance with his national law. Such divorce decree is valid and
the due execution of the will. Paula, the first wife, filed with the same court a recognized in this jurisdiction as a matter of comity.
petition for letters of administration alleging that she was deprived of ½ of her 3. Whether the will is intrinsically valid are issues best proved by foreign
legitime. The trial court granted the petition of Paula ruling that the divorce decree law which must be pleaded and proved. Whether the will was executed
was valid and therefore the 2nd marriage with Alicia was likewise void. Corollary, in accordance with the formalities required is answered by referring to
the intrinsic disposition in the will is also void. This was affirmed with Philippine law.
modification ruling that Alicia is entitled as co-owner of whatever properties she
and Lorenzo had acquired during the 25 year period of their cohabitation. Hence,
this petition.

Issue No.1: WoN the Philippine Law is applicable – No. The fact that the late FACTS:
Lorenzo became an American citizen long before and at the time of: (1) his 1. The deceased Lorenzo N. Llorente (Lorenzo) was an enlisted
divorce from Paula; (2) marriage to Alicia; (3) execution of his will; and (4) death, serviceman of the United States Navy from March 10, 1927 to
is duly established, admitted and undisputed. Therefore, the nationality law of the September 30, 1957.
decedent must be followed. The trial court and CA erred in applying the Renvoi 2. 1ST MARRIAGE: On February 22, 1937, Lorenzo and petitioner
doctrine by ruling that American law follows the domiciliary theory hence, Paula Llorente (Paula) were married before a parish priest, Roman
Philippine law applies when determining the validity of Lorenzos will. First, there Catholic Church, in Nabua, Camarines Sur.
is no such thing as one American law. The "national law" indicated in Article 16 3. Before the outbreak of the Pacific War, Lorenzo departed for the
of the Civil Code cannot possibly apply to general American law. There is no
United States and Paula stayed in the conjugal home in barrio
such law governing the validity of testamentary provisions in the United
Antipolo, Nabua, Camarines Sur.
States. Each State of the union has its own law applicable to its citizens and in
4. ACQUISITION OF US CITIZENSHIP: On November 30, 1943,
 Lorenzo was admitted to United States citizenship and Certificate Llorente (Alicia) in Manila. Apparently, Alicia had no knowledge of
of Naturalization No. 5579816 was issued in his favor by the the first marriage even if they resided in the same town as Paula, who
United States District Court, Southern District of New York. did not oppose the marriage or cohabitation.
5. Upon the liberation of the Philippines by the American Forces in 1945, 10. From 1958 to 1985, Lorenzo and Alicia lived together as husband and
Lorenzo was granted an accrued leave by the U. S. Navy, to visit his wife. Their twenty-five (25) year union produced three children, Raul,
wife and he visited the Philippines. He discovered that his wife Paula Luz and Beverly, all surnamed Llorente.
was pregnant and was living in and having an adulterous relationship 11. EXECUTION OF LAST WILL: On March 13, 1981, Lorenzo
with his brother, Ceferino Llorente. executed a Last Will and Testament. The will was notarized by Notary
a. On December 4, 1945, Paula gave birth to a boy registered in Public Salvador M. Occiano, duly signed by Lorenzo with attesting
the Office of the Registrar of Nabua as Crisologo Llorente, witnesses Francisco Hugo, Francisco Neibres and Tito Trajano. In the
with the certificate stating that the child was not legitimate will, Lorenzo bequeathed all his property to Alicia and their three
and the line for the fathers name was left blank. children (see end of digest for specific designations).
6. Lorenzo refused to forgive Paula and live with her. In fact, on 12. PETITION FOR PROBATE: On December 14, 1983, Lorenzo filed
February 2, 1946, the couple drew a written agreement to the effect with the Regional Trial Court, Iriga, Camarines Sur, a petition for the
that (1) all the family allowances allotted by the United States Navy probate and allowance of his last will and testament wherein Lorenzo
as part of Lorenzo’s salary and all other obligations for Paula’s daily moved that Alicia be appointed Special Administratrix of his estate.
maintenance and support would be suspended; (2) they would dissolve 13. On January 18, 1984, the trial court denied the motion for the reason
their marital union in accordance with judicial proceedings; (3) they that the testator Lorenzo was still alive.
would make a separate agreement regarding their conjugal property 14. On January 24, 1984, finding that the will was duly executed, the trial
acquired during their marital life; and (4) Lorenzo would not prosecute court admitted the will to probate.
Paula for her adulterous act since she voluntarily admitted her fault 15. On June 11, 1985, before the proceedings could be terminated,
and agreed to separate from Lorenzo peacefully. The agreement was Lorenzo died.
signed by both Lorenzo and Paula and was witnessed by Paula’s father 16. On September 4, 1985, Paula (1st wife) filed with the same court a
and stepmother. The agreement was notarized by Notary Public Pedro petition for letters of administration over Lorenzos estate in her
Osabel. favor. Paula contended (1) that she was Lorenzos surviving spouse,
7. DIVORCE DECREE: Lorenzo returned to the United States and on (2) that the various property were acquired during their marriage, (3)
November 16, 1951 filed for divorce with the Superior Court of the that Lorenzos will disposed of all his property in favor of Alicia and
State of California in and for the County of San Diego. Paula was her children, encroaching on her legitime and 1/2 share in the conjugal
represented by counsel, John Riley, and actively participated in the property.
proceedings. On November 27, 1951, the Superior Court of the State 17. On December 13, 1985, Alicia (2nd wife) filed in the testate proceeding
of California, for the County of San Diego found all factual allegations (Sp. Proc. No. IR-755), a petition for the issuance of letters
to be true and issued an interlocutory judgment of divorce. testamentary.
a. On December 4, 1952, the divorce decree became final. 18. On October 14, 1985, without terminating the testate proceedings, the
8. In the meantime, Lorenzo returned to the Philippines. trial court gave due course to Paula’s petition in Sp. Proc. No. IR-888.
9. 2ND MARRIAGE: On January 16, 1958, Lorenzo married Alicia F. a. The order was published in the newspaper Bicol Star.
19. On May 18, 1987, the Regional Trial Court issued a joint decision, 20. In time, Alicia filed with the trial court a motion for reconsideration
thus: of the aforequoted decision. The trial court denied Alicias motion for
Wherefore, considering that this court has so found that the reconsideration but modified the earlier decision, stating that Raul and
divorce decree granted to the late Lorenzo Llorente is void and Luz Llorente are not legitimate children or otherwise of Lorenzo since
inapplicable in the Philippines, therefore the marriage he they were not legally adopted by him. Amending its decision of May
contracted with Alicia Fortunato on January 16, 1958 at Manila 18, 1987, the trial court declared Beverly Llorente as the only
is likewise void. This being so the petition of Alicia F. Llorente for illegitimate child of Lorenzo, entitling her to one-third (1/3) of the
the issuance of letters testamentary is denied. Likewise, she is not estate and one-third (1/3) of the free portion of the estate.
entitled to receive any share from the estate even if the will especially 21. On September 28, 1987, Alicia appealed to the Court of Appeals. On
said so her relationship with Lorenzo having gained the status of July 31, 1995, the Court of Appeals promulgated its decision,
paramour which is under Art. 739 (1). affirming with modification the decision of the trial court in this wise:
WHEREFORE, the decision appealed from is hereby AFFIRMED
On the other hand, the court finds the petition of Paula Titular with the MODIFICATION that Alicia is declared as co-owner of
Llorente, meritorious, and so declares the intrinsic disposition of the whatever properties she and the deceased may have acquired during
will of Lorenzo Llorente dated March 13, 1981 as void and declares the twenty-five (25) years of cohabitation.
her entitled as conjugal partner and entitled to one-half of their
conjugal properties, and as primary compulsory heir, Paula T. Llorente 22. MR was denied. Hence this petition.
is also entitled to one-third of the estate and then one-third should go
to the illegitimate children, Raul, Luz and Beverly, all surname (sic) ISSUE:
Llorente, for them to partition in equal shares and also entitled to the 1. WoN the Philippines Law is applicable – No, Lorenzo was already an
remaining free portion in equal shares. American Citizen when all the factual and legal circumstances in this
case was brought before the court.
Petitioner, Paula Llorente is appointed legal administrator of the estate 2. WoN the Divorce Decree is valid – Yes, being an Alien, Lorenzo
of the deceased, Lorenzo Llorente. As such let the corresponding validly obtained a divorce decree in accordance with the law of his
letters of administration issue in her favor upon her filing a bond in nationality.
3. WoN the will is valid – Extrinsically, yes, and in fact it was duly
the amount (sic) of P100,000.00 conditioned for her to make a return
probated. But for the intrinsic validity, it must still be pleaded and
to the court within three (3) months a true and complete inventory of proved in accordance with the foreign law of the decedent and
all goods, chattels, rights, and credits, and estate which shall at any therefore a remand is proper.
time come to her possession or to the possession of any other person
for her, and from the proceeds to pay and discharge all debts, legacies RULING: The petition is GRANTED. The decision of the Court of Appeals
and charges on the same, or such dividends thereon as shall be decreed is SET ASIDE. In lieu thereof, the Court REVERSES the decision of the
or required by this court; to render a true and just account of her Regional Trial Court and RECOGNIZES as VALID the decree of divorce
administration to the court within one (1) year, and at any other time granted in favor of the deceased Lorenzo N. Llorente by the Superior Court of
when required by the court and to perform all orders of this court by the State of California in and for the County of San Diego, made final on
her to be performed. December 4, 1952. Further, the Court REMANDS the cases to the court of
origin for determination of the intrinsic validity of Lorenzo N. Llorentes albeit equally unproven statement that American law follows the
will and determination of the parties successional rights allowing proof of domiciliary theory hence, Philippine law applies when determining
foreign law with instructions that the trial court shall proceed with all the validity of Lorenzos will.
deliberate dispatch to settle the estate of the deceased within the framework of 6. First, there is no such thing as one American law. The "national
the Rules of Court. law" indicated in Article 16 of the Civil Code cannot possibly apply
to general American law. There is no such law governing the validity
RATIO: of testamentary provisions in the United States. Each State of the
union has its own law applicable to its citizens and in force only
The Applicable Law
within the State. It can therefore refer to no other than the law of
1. The fact that the late Lorenzo became an American citizen long
before and at the time of: (1) his divorce from Paula; (2) marriage to the State of which the decedent was a resident (New York).
Alicia; (3) execution of his will; and (4) death, is duly established, 7. Second, there is no showing that the application of
admitted and undisputed. the renvoi doctrine is called for or required by New York State
2. Thus, as a rule, issues arising from these incidents are necessarily law. The trial court held that the will was intrinsically invalid since it
governed by foreign law. The Civil Code clearly provides: contained dispositions in favor of Alice, who in the trial courts opinion
Art. 15. Laws relating to family rights and duties, or to the status, was a mere paramour. The trial court threw the will out, leaving Alice,
condition and legal capacity of persons are binding upon citizens of and her two children, Raul and Luz, with nothing.
the Philippines, even though living abroad. 8. The Court of Appeals also disregarded the will. It declared Alice
Art. 16. Real property as well as personal property is subject to the law entitled to one half (1/2) of whatever property she and Lorenzo
of the country where it is situated. acquired during their cohabitation, applying Article 144 of the Civil
However, intestate and testamentary succession, both with respect to Code of the Philippines.
the order of succession and to the amount of successional rights and 9. The hasty application of Philippine law and the complete
to the intrinsic validity of testamentary provisions, shall be regulated disregard of the will, already probated as duly executed in
by the national law of the person whose succession is under accordance with the formalities of Philippine law, is
consideration, whatever may be the nature of the property and fatal, especially in light of the factual and legal circumstances here
regardless of the country wherein said property may be found. obtaining.
3. True, foreign laws do not prove themselves in our jurisdiction and
our courts are not authorized to take judicial notice of them. Like Validity of Foreign Divorce Decree
any other fact, they must be alleged and proved.
4. While the substance of the foreign law was pleaded, the Court of 10. In Van Dorn v. Romillo, Jr. we held that owing to the nationality
Appeals did not admit the foreign law. The Court of Appeals and the principle embodied in Article 15 of the Civil Code, only Philippine
trial court called to the fore the renvoi doctrine, where the case nationals are covered by the policy against absolute divorces, the same
was referred back to the law of the decedents domicile, in this case, being considered contrary to our concept of public policy and
Philippine law. morality. In the same case, the Court ruled that aliens may obtain
5. We note that while the trial court stated that the law of New York was divorces abroad, provided they are valid according to their
not sufficiently proven, in the same breath it made the categorical, national law.
 11. Citing this landmark case, the Court held in Quita v. Court of Appeals, with the formalities required is answered by referring to
that once proven that respondent was no longer a Filipino citizen when Philippine law. In fact, the will was duly probated.
he obtained the divorce from petitioner, the ruling in Van Dorn would 17. As a guide however, the trial court should note that whatever
become applicable and petitioner could very well lose her right to public policy or good customs may be involved in our system of
inherit from him. legitimes, Congress did not intend to extend the same to the
12. In Pilapil v. Ibay-Somera, we recognized the divorce obtained by the succession of foreign nationals. Congress specifically left the
respondent (alien) in his country, the Federal Republic of amount of successional rights to the decedent's national law.
Germany. There, we stated that divorce and its legal effects may be (1) I give and bequeath to my wife ALICIA R. FORTUNO exclusively my residential house and lot, located
at San Francisco, Nabua, Camarines Sur, Philippines, including ALL the personal properties and other
recognized in the Philippines insofar as respondent is concerned in movables or belongings that may be found or existing therein;
view of the nationality principle in our civil law on the status of (2) I give and bequeath exclusively to my wife Alicia R. Fortuno and to my children, Raul F. Llorente, Luz
F. Llorente and Beverly F. Llorente, in equal shares, all my real properties whatsoever and wheresoever
persons.
located, specifically my real properties located at Barangay Aro-Aldao, Nabua, Camarines Sur; Barangay
13. For failing to apply these doctrines, the decision of the Court of Paloyon, Nabua, Camarines Sur; Barangay Baras, Sitio Puga, Nabua, Camarines Sur; and Barangay
Appeals must be reversed. We hold that the divorce obtained by Paloyon, Sitio Nalilidong, Nabua, Camarines Sur;
(3) I likewise give and bequeath exclusively unto my wife Alicia R. Fortuno and unto my children, Raul F.
Lorenzo H. Llorente from his first wife Paula was valid and Llorente, Luz F. Llorente and Beverly F. Llorente, in equal shares, my real properties located in Quezon
recognized in this jurisdiction as a matter of comity. Now, the City Philippines, and covered by Transfer Certificate of Title No. 188652; and my lands in Antipolo, Rizal,
effects of this divorce (as to the succession to the estate of the Philippines, covered by Transfer Certificate of Title Nos. 124196 and 165188, both of the Registry of Deeds
of the province of Rizal, Philippines;
decedent) are matters best left to the determination of the trial court. (4) That their respective shares in the above-mentioned properties, whether real or personal properties, shall
not be disposed of, ceded, sold and conveyed to any other persons, but could only be sold, ceded, conveyed
Validity of the Will and disposed of by and among themselves;
14. The Civil Code provides: (5) I designate my wife ALICIA R. FORTUNO to be the sole executor of this my Last Will and Testament,
and in her default or incapacity of the latter to act, any of my children in the order of age, if of age;
Art. 17. The forms and solemnities of contracts, wills, and other (6) I hereby direct that the executor named herein or her lawful substitute should served (sic) without bond;
public instruments shall be governed by the laws of the country in (7) I hereby revoke any and all my other wills, codicils, or testamentary dispositions heretofore executed,
signed, or published, by me;
which they are executed.
(8) It is my final wish and desire that if I die, no relatives of mine in any degree in the Llorentes Side should
When the acts referred to are executed before the diplomatic or ever bother and disturb in any manner whatsoever my wife Alicia R. Fortunato and my children with respect
consular officials of the Republic of the Philippines in a foreign to any real or personal properties I gave and bequeathed respectively to each one of them by virtue of this
Last Will and Testament.
country, the solemnities established by Philippine laws shall be
observed in their execution.
15. The clear intent of Lorenzo to bequeath his property to his second wife
and children by her is glaringly shown in the will he executed. We do
not wish to frustrate his wishes, since he was a foreigner, not
covered by our laws on family rights and duties, status, condition
and legal capacity.
16. Whether the will is intrinsically valid and who shall inherit from
Lorenzo are issues best proved by foreign law which must be
pleaded and proved. Whether the will was executed in accordance
 014 SALUDO v. AMERICAN EXPRESS (Arcenas) such intention. Hence, bodily presence as an inhabitant was sufficient for him to be
April 19, 2006 | Callejo, Sr., J. | Domicile a resident for purposes of venue.

PETITIONER/S: Aniceto G. Saludo DOCTRINE: In Conflict of Laws that domicile refers to the relatively more
RESPONDENTS: American Express International, Inc. and/or Ian T. Fish and permanent abode of a person while residence refers to a temporary stay of a person
Dominic Mascrinas in a given place. (See table below for summary of definitions per law)
FACTS:
SUMMARY: SALUDO is the congressman of S. Leyte and resides thereat with a 8. Aniceto Saludo, Jr (SALUDO) filed a complaint for damages against AMEX
law firm at Pasay City, whereas AMEX, FISH and MASCRINAS are engaged in and/or its officers Ian T. Fish (FISH), Vice-President and Country Manager,
doing business in PH with principal office at Makati City. He filed a a complaint and Dominic Mascrinas (MASCRINAS), Head of Operations, with Branch
for damages against AMEX, FISH and MASCRINAS with RTC in S. Leyte. The 25 RTC Maasin City, Southern Leyte.
cause of action stems from the wrongful dishonor of SALUDO’s AMEX credit a. Complaint alleged that SALUDO is a Filipino citizen, of legal age,
card and supplementary card issued to his daughter where the first dishonor took anda a member of the House of Representatives, and a resident of
place in the US dishonoring the purhases of his daughter and in Japan where Incon, Macrohon, Southern Leyte, PH.
SALUDO failed to pay his balance with Hotel Okawa during a Congressional b. AMEX is a corporation doing business in the PH and engaged in
Recognition. Having suffered great inconvenience and besmirched political and providing credit and other credit facilities and allied services with
professional standing due to AMEX’ gross and evident bad faith, and wanton, office address at 4th/fl, ACE Bldg, Rada St., Legaspi Village, Makati
recless and oppressive acts, he prayed for actual, moral, and exemplary and AF. City.
AMEX countered that the complaint lacks cause of action and the complaint should 9. Cause of action: wrongful dishonor of SALUDO’s AMEX credit card and
be dismissed on the ground that venue was improperly laid because none of the supplementary card issued to his daughter (DAUGHTER, name not
parties was a resident of Leyte since AMEX, FISH and MASCRINAS were not mentioned).
residents of S. Leyte and that SALUDO was not a resident of S. Leyte but Pasay a. 1st dishonor – DAUGHTER used her supplementary card to pay her
City, based on his community tax certificate, when he executed the complaint’s purchases in the US in April 2000.
verification and certification of non-forum shopping. RTC held that SALUDO was b. 2nd dishonor – SALUDO used his principal credit card to pay Hotel
a resident of S. Leyte by taking judicial notice of his high-ranking position as Okawa in Tokyo, Japan while he was there with other delegates
Congressman who was duly elected for such position meaning he possessed all from PH to attend the Congressional Recognition in honor of Mr.
requirements prescribed by the Constitution (including residence). CA reversed Hiroshi Tanaka.
based on RA 7160 which provides that CTC shall be paid in the place of residence 10. SALUDO alleges such dishonors were unjustified as they resulted from
of individual or in the palce where meaning since CTC was issued at Pasay, AMEX’ unilateral act of suspending SALUDO’s account for his failure to
SALUDO resided in Pasay, not S. Leyte. Hence this petition. The issue is hether pay its balance covering the period of March 2000.
CA erred in holding that venue was improperly laid because not one of the parties, a. SALUDO denies having received the statement of account.
including SALUDO, was a resident of S. Leyte at the time of filing the complaint. b. He was wrongfully charged late payment in June 2000.
c. His principal and its supplementary cards were cancelled by AMEX
The SC held YES, CA erred. Various defnitions of residence and domicile were on July 20, 2000.
discussed. For purposes of election law, residence is synonymous with domicile. 11. That SALUDO suffered great inconvenience, wounded feelings, mental
For purposes of venue, less technical definition of residence is adopted, that is, anguish, embarrassment, humiliation and besmirched political and
personal residence, not legal residence or domicile. It merely requires bodily professional standing due to AMEX’ gross and evident bad faith, and wanton,
presence as an inhabitant in a given place. RTC properly took judicial notice of the recless and oppressive acts. He prayed for actual, moral, and exemplary and
fact that SALUDO was congressman of S. Leyte and so deemed to possess the AF.
qualifications for said position, including that he was a resident. So, following 12. AMEX’ reply – specifically denied the allegations.
election law definition of residence, SALUDO not only had intention to reside in S. a. Raised affirmative defenses of lack of cause of action and such
Leyte by he also had personal presence therein, coupled with conduct indicative of complaint be dismissed on the ground that venue was improperly
laid because none of the parties was a resident of Leyte.
 b. AMEX, FISH and MASCRINAS were not residents of S. Leyte and i. Under RA 7160, CTC shall be paid in the place of
that SALUDO was not a resident of S. Leyte but Pasay City (based residence of individual or in the palce where the principal
on his community tax certificate [CTC]) when he executed the office of the juridical entity is located.
complaint’s verification and certification of non-forum shopping ii. That his law office represented him in the present case was
i. AMEX pointed out that the complaint was prepared in taken as judicial admission by SALUDO
Pasay City and signed by a lawyer there. c. Actual residence may not necessarily be his legal residence or
13. AMEX filed an opposition to ex-parte mation (to set case for pre-trial) and domicil provided he resides therein with contiuity and consistency.
for Preliminary Hearing (on affirmative defense of improper venue); i. Where domicile is more permanent abode/fixed permanent
SALUDO filed his comments and/or objections. residence with intention to return
a. That the allegations of non-residency in S. Leyte was baseless and ii. residence is temporary/permanent place abode in a given
unfounded since he was the congressman of the lone district at the place.
time the complaint was filed. d. That while SALUDO had choice of venue (either Pasay or Makati)
b. He wanted the court to take judicial notice of that fact – that he was such choice is not left to his caprice and cannot deprive AMEX et al
a member of Congress who possessed all qualifications prescribed rights conferred upon them by ROC.
by the Constitution including that of being a resident of his district. i. ROC fixed the rules to attain the greatest possible
He was also a member of the IBP – S. Leyte Chapter, ever since his convenience to party litigants by taking into consideration
admission to the Bar. the maximum accessibility to both of them i.e. plaintiff and
c. His CTC was issued at Pasay City only because his office was in defendant of the courts of justice.
Pasay and that CTC was not determinative of one’s residence. 16. SALUDO’s MR was denied; hence this petition.
14. RTC RULING: denied affirmative defenses. Allegations of complaint was
sufficient to constitute cause of action against AMEX et al. ISSUE/s: Whether CA erred in holding that venue was improperly laid because not
a. SALUDO is incumbent Congressman of lone district of S. Leyte one of the parties, including SALUDO, was a resident of S. Leyte at the time of
with residence thereat to dispel any doubts about his actual residence filing the complaint – YES, CA erred. SALUDO was congressman of S. Leyte and
b. As a high-ranking gov’t official of S. Leyte, his residence can be so deemed to possess the qualifications for said position, including that he was a
taken judicial notice of. resident. So, following election law definition of residence, SALUDO not only had
c. SALUDO’s personal, actual and physical habitation (actual intention to reside in S. Leyte by he also had personal presence therein, coupled with
residence or place of abode) can never be in some other place but conduct indicative of such intention. Hence, bodily presence as an inhabitatnt was
Ichon, Macrohon, S. Leyte. sufficient for him to be a resident for purposes of venue.
d. A man can have many places of residence, but only one domicile.
e. AMEX’ MR was denied. So they filed a petition for certiorari and
prohibition alleging GAD of RTC Judge. RULING: Petition GRANTED. CA ruling reversed & set aside. Order of RTC
15. CA RULING: Granted AMEX’ certiorari and found that venue was reinstated.
improperly laid. RTC judge enjoined from proceeding in the case, except to
dismiss the case. RATIO:
a. CA said that the complaint was governed by Section 2, Rule 4 ROC 1. The choice of venue for personal actions (in this case a complaint for
on venue of personal actions providing that such may be damages) cognizable by RTC is given to plaintiff but not to plaintiff’s caprice
commenced and tried where plaintiff or any principal plaintiff because the matter is regulated by ROC.
resides or where defendant or any of principal defendants resides, at a. The rules on venue, like other procedural rules, is designed to insure
election of plaintiff. a just and orderly administration ofjustice or impartial and
b. Hence, venue was improperly laid in this cases since parties were evenhanded determination of every action and proceeding.
not residents of S. Leyte – that SALUDO was not a resident based b. SALUDO opted to file in Maasin City, S. Leyte alleging that as
on his CTC which was issued at Pasay City. member of HR and resident of Ichon, Macrohon, S. Leyte to comply
with residency requirement of the rule.
2. SC found CA committed reversible error in finding that SALUDO was not a in Ilocos N. and manifested his intent to return after retirement, he
resident of S. Leyte at the time of filing of his complaint and holding that had not established he was actually a resident (hence, personal
venue was improperly laid by RTC. presence was lacking).
3. In Dangwa Transportation Co. Inc. v. Sarmiento, residence as used in the b. In this case, SALUDO was congressman of S. Leyte and so deemed
rules of venue on personal actions meanas the place of abode, whether to possess the qualifications for said position, including that he was
permanent or temporary of the plaintiff or of the defendant. Whereas, a resident. So, following election law definition of residence,
domicile denotes a fixed permanent residence to which, when absent, one has SALUDO not only had intention to reside in S. Leyte by he also had
the intention of returning. personal presence therein, coupled with conduct indicative of such
4. That domicile is not exactly synonymous in legal contemplation with the term intention. Hence, bodily presence as an inhabitatnt was sufficient for
residence, for it is an established principle in Conflict of Laws that domicile him to be a resident for purposes of venue.
refers to the relatively more permanent abode of a person while 10. RTC was correct. A person can have two or more residences such as a country
residence refers to a temporary stay of a person in a given place. residence and a city residence. Residence is acquired by living in a place,
a. Such distinction is well emphasized in those cases where the whereas domicile can exist without actually living in the place.
Domiciliary Theory must necessarily supplant the Nationality a. It is important for domicile is that once residence is established in
Theory in cases involving stateless persons. one place, there can be an intention to stay there permanently, even
5. No dispute that SALUDO was the congressman or representative of the lone if residence is also established in some other place.
district of S. Leyte and even the CA admits the same and that RTC correctly 11. SALUDO’s CTC being issued at Pasay City is unimportant because granting
deemed SALUDO as possessing the requirements of for the said position, arguendo that he could be considered a resident of Pasay, it will not preclude
including that he was then a resident of the district he was representing. his having residence in S. Leyte for purposes of venue. A man can have
6. For purposes of election law, residence is synonymous with domicile numerous places of residence.
a. Residence imports (1) intention to reside in a fixed place but also (2) 12. SALUDO’s residence, being a congressman of S. Leyte, can be taken judicial
personal presence in that place coupled with conduct indicative of notice of.
such intention a. Courts can take judicial notice of matters which are of public
i. Residence is more stringent in that it is equated with knowledge, or are capable of unquestionable demonstration or ought
domicile – since residence has two requirements above. to be known to judges because of their judicial functions.
b. Domicile denotes a fixed permanent residence to which when absent b. Hence, courts are bound to take judicial notice, without introduction
for business or pleasure, or other reasons, one intends to return of evidence, of the law in force in the PH, including its Constitution.
7. For purposes of venue, less technical definition of residence is adopted, that c. Facts of common knowledge are those so commonly known in the
is, personal residence, not legal residence or domicile. It merely requires community as to make it unprofitable to require proof. The fact that
bodily presence as an inhabitant in a given place SALUDO being the duly elected representative of S. Leyte at the
a. Residence is the personal, actual or physical habitation of a time could be properly taken judicial notice of by RTC, the same
perso, actual residence or place of abode and signifies physical being a matter of common knowledge in the community where it
presence in a place and actual stay thereat sits.
b. Domicile requires bodily presence in that place and also an
intention to make it one’s domicile. LAW RESIDENCE DOMICILE
8. Since SALUDO as congressman had his residence or domicile therein as the Confict of Laws Temporary stay in a Relatively more
term is construed in relation to election laws, necessarily, he is also deemed given place permanent abode
to have had his residence in S. Leyte for purposes of venue for filing personal Election (terms are (1) intention to reside a fixed permanent
actions. This is because residence is not domicile, but domicile is residence synonymous) in a fixed place but residence to which
coupled with intention to remain for an unlimited time also (2) personal when absent for
9. CA erred in relying on Koh v. CA because the facts of Koh and this case are presence in that place business or pleasure,
different.
coupled with conduct or other reasons, one
a. In Koh, complaint was filed in CFI Ilocos N. by the plaintif who
intends to return
admitted he resided in Kamias, Quezon City even if he did grow up
 indicative of such
intention

Rules on Venue (ROC) personal, actual or requires bodily

physical habitation of presence in that place
a perso, actual and also an intention
residence or place of to make it one’s
abode and signifies domicile.
physical presence in a
place and actual stay
thereat
 Adong v. Cheong Seng Gee (Linds) sustained the trial judge in finding that there is a strong inclination of the
March 3, 1922 | Malcolm, J. | Validity of marriages; Processual Presumption witnesses presented by Gee to protect his interests and therefore to overstep the
limits of truthfulness. The immigration documents on record also show only the
PETITIONER: In the Matter of Testate Estate of Cheong Boo relation of Gee and Boo as child and parent but no record as to the marriage
x- - - - - - - - - -x between Boo and Dit. To establish a valid foreign marriage pursuant to this
PETITIONER: Mora Adong comity provision, it is first necessary to prove before the courts of the Islands the
existence of the foreign law as a question of fact, and it is then necessary to prove
RESPONDENTS: Cheong Seng Gee
the alleged foreign marriage by convincing evidence. No competent testimony
nor document was ever present or was ever competent enough to prove the
SUMMARY: Boo, a native of China, died intestate in Zamboanga. He left
validity of the Chinese marriage.
property nearly P100T. His estate was claimed by, Gee, who alleged that he was
a legitimate child by marriage contracted by Boo with Dit in China (1895). The As to the Mohammedian marriage, the SC cited several requirements for the
estate is also claimed by Mora, who alleged that she had been lawfully married to validity of marriage in the PH, but found Sec. IX of the General Law as
Boo in Basilan (1896). These conflicting claims were ventilated in CFI controlling, it provides that: No marriage heretofore solemnized before any
Zamboanga. The judge reached a conclusion that the proof in the records do not person professing to have authority therefor shall be invalid for want of such
sufficiently establish the Chinese marriage between Boo and Dit, but he was a
authority or on account of any informality, irregularity, or omission, if it was
natural child of Boo (hence, illegitimate). As regards the marriage between Mora
celebrated with the belief of the parties, or either of them, that he had authority
and Boo, marriage has been adequately proved but was not valid according to the
and that they have been lawfully married."
laws of the PH.
It is to be noted that the trial judge did not believe that the legislative intent behind
As regards the claim of Gee, he alleged that Boo was married in Amoy, China
the above-cited provision did not mean to validate marriages performed under
with Dit, and witnesses were presented who testified as to the marriage. Boo has
Mohammedian rites. The SC disagreed, saying that Sec. IX is all-embracing and
remained in China for 1year and 4 months then he left for the PH who took it could not have been any clearer. This covers the validation of marriages under
himself a concubine named Mora whom he had 2 children. Gee said that he Mohammedian rights. The purpose of the government toward the Mohammedan
followed him in the PH and Gee had no more correspondence with Dit except that population of the Philippines has, time and again, been announced by treaty,
one time he sent her P10. organic law, statutory law, and executive proclamation all echoing the same
essence: “No law shall be passed respecting an establishment of religion and
As regards the claim of Mora, Boo arrived in the PH sometime in 1896, where he
prohibiting the free exercise thereof, and that the free exercise and enjoyment of
met Mora and married her according to the book of Koran, through a
religious profession and worship, without discrimination or preference, shall
Mohammedian priest, an Imam. They cohabited for 23 years and Boo treated
forever be allowed.” The basis of human society throughout the civilized world
Mora as her lawful wife, whom he had 5 children, which only 2 are living, Payag
is that of marriage. Marriage in this jurisdiction is not only a civil contract, but, it
and Rosalia.
is a new relation, an institution in the maintenance of which the public is deeply
interested. Consequently, every intendment of the law leans toward legalizing
The Chinese counsel for Gee insinuates that it is prevalent among Moros to favor matrimony.
in testimony their friends and relatives, especially in this case where they did not
swear before the Koran as to the truth of their statements. DOCTRINE: To establish a valid foreign marriage pursuant to this comity
provision, it is first necessary to prove before the courts of the Islands the
The issue in this case is the validity of the Chinese and the Mohammedian existence of the foreign law as a question of fact, and it is then necessary to prove
marriages.
the alleged foreign marriage by convincing evidence.
As to the Chinese marriage, the trial court ruled that there was no valid Chinese
Sempter pressumitur pro matrimonio. Every intendment of the law leans toward
marriage and that Gee was declared only as a natural (not legitimate) child of
legalizing matrimony.
Boo. Gee did not assign this as an error on appeal; the SC did not disturb the
findings of the trial judge. But the SC then went to discuss its validity, and ruled
Long case sad
FACTS: Claim of Cheong Seng Gee as to the first issue
1. Cheong Boo, a native of China, died intestate in Zamboanga, 1. The theory advanced on behalf of the claimant Cheong Seng Gee was
Philippine Islands, on August 5, 1919. that Cheong Boo was married in the city of Amoy, China, during the
2. He left property worth nearly P100,000. second moon of the twenty-first year of the Emperor Quang Su, or,
3. The estate of the deceased was claimed, on the one hand, by Cheong according to the modern count, on February 16, 1985, to a young lady
Seng Gee, who alleged that he was a legitimate child by a marriage named Tan Dit. Witnesses were presented who testified to having been
contracted by Cheong Boo with Tan Dit in China in 1895. present at the marriage ceremony.
4. The estate was claimed, on the other hand, by the Mora Adong who 2. Cheong Boo is said to have remained in China for one year and four
alleged that she had been lawfully married to Cheong Boo in 1896 in months after his marriage during which time there was born to him
Basilan, Philippine Islands, and her daughters, Payang, married to and his wife a child named Cheong Seng Gee. Cheong Boo then left
Cheng Bian Chay, and Rosalia Cheong Boo, unmarried. China for the Philippine Islands and sometime thereafter took to
5. The conflicting claims to the estate of Cheong Boo were ventilated in himself a concubine Mora by whom he had two children. In 1910,
the Court of First Instance of Zamboanga. Cheong Boo was followed to the Philippines by Cheong Seng Gee
6. The trial judge, the Honorable Quirico Abeto, after hearing the who, as appears from documents presented in evidence, was permitted
evidence presented by both sides, reached the conclusion, with to land in the Philippine Islands as the son of Cheong Boo. The
reference to the allegations of Cheong Seng Gee, that the proof did not deceased, however, never returned to his native hearth and seems
sufficiently establish the Chinese marriage, but that because Cheong never to have corresponded with his Chinese wife or to have had any
Seng Gee had been admitted to the Philippine Islands as the son of the further relations with her except once when he sent her P10.
deceased, he should share in the estate as a natural child.
7. With reference to the allegations of the Mora Adong and her daughters Ruling as to first issue
Payang and Rosalia, the trial judge reached the conclusion that the 3. Section IV of the Marriage Law (General Order No. 68) provides that
marriage between the Mora Adong and the deceased had been "All marriages contracted without these Islands, which would be valid
adequately proved but that under the laws of the Philippine Islands it by the laws of the country in which the same were contracted, are valid
could not be held to be a lawful marriage; accordingly, the daughters in these Islands." To establish a valid foreign marriage pursuant to this
Payang and Rosalia would inherit as natural children. comity provision, it is first necessary to prove before the courts of the
8. The order of the trial judge, following these conclusions, was that Islands the existence of the foreign law as a question of fact, and it is
there should be a partition of the property of the deceased Cheong Boo then necessary to prove the alleged foreign marriage by convincing
between the natural children, Cheong Seng Gee, Payang, and Rosalia. evidence.
9. Both parties appealed. 4. The lower court allowed the claimant, Cheong Seng Gee, the
testamentary rights of an acknowledged natural child. This finding
ISSUES: Whether the Chinese marriage is valid. No. Gee did not assign this finds some support in Exhibit 3, the affidavit of Cheong Boo before
as an error on appeal; SC did not disturb the court a quo’s ruling that there was the American Vice-Consul at Sandakan, British North Borneo. But we
no valid Chinese marriage. are not called upon to make a pronouncement on the question, because
Whether the Mohammedian marriage is valid. Yes. There is sufficient proof the oppositor-appellant indicates silent acquiescence by assigning no
of the validity of the Mohammedian marriage. error.

RULING: Judgment reversed in part. Facts as to the second issue

5. The biographical data relating to the Philippine odyssey of the
RATIO: Chinaman Cheong Boo is fairly complete. He appears to have first
 landed on Philippine soil sometime prior to the year 1896. At least, in any denomination" would limit the meaning of this clause to ministers
the year las mentioned, we find him in Basilan, Philippine Islands. of the Christian religion. We believe this is a strained interpretation.
There he was married to the Mora Adong according to the ceremonies "Priest," according to the lexicographers, means one especially
prescribed by the book on marriage of the Koran, by the Mohammedan consecrated to the service of a divinity and considered as the medium
Iman (priest) Habubakar. That a marriage ceremony took place is through whom worship, prayer, sacrifice, or other service is to be
established by one of the parties to the marriage, the Mora Adong, by offered to the being worshipped, and pardon, blessing, deliverance,
the Iman who solemnized the marriage, and by other eyewitnesses, etc., obtained by the worshipper, as a priest of Baal or of Jehovah; a
one of whom was the father of the bride, and another, the chief of the Buddhist priest. "Minister of the Gospel" means all clergymen of
rancheria, now a municipal councilor. The groom complied with every denomination and faith. A "denomination" is a religious sect
Quranic law by giving to the bride a dowry of P250 in money and having a particular name. A Mohammedan Iman is a "priest or
P250 in goods. minister of the Gospel," and Mohammedanism is a "denomination,"
6. The religious rites began with the bride and groom seating themselves within the meaning of the Marriage Law.
in the house of the father of the bride, Marahadja Sahibil. The Iman 10. The following section of the Marriage Law, No. VI, provides that "No
read from the Koran. Then the Iman asked the parents if they had any particular form for the ceremony of marriage is required, but the
objection to the marriage. The marital act was consummated by the parties must declare, in the presence of the person solemnizing the
groom entering the woman's mosquito net. marriage, that they take each other as husband and wife." The law is
7. From the marriage day until the death of Cheong Boo, twenty-three quite correct in affirming that no precise ceremonial is indispensable
years later, the Chinaman and the Mora Adong cohabited as husband requisite for the creation of the marriage contract. The two essentials
and wife. To them were born five children, two of whom, Payang and of a valid marriage are capacity and consent. The latter element may
Rosalia, are living. Both in his relations with Mora Adong and with be inferred from the ceremony performed, the acts of the parties, and
third persons during his lifetime, Cheong Boo treated Adong as his habit or repute. In this instance, there is no question of capacity. Nor
lawful wife. He admitted this relationship in several private and public do we think there can exist any doubt as to consent. While it is true
documents. Thus, when different legal documents were executed, that during the Mohammedan ceremony, the remarks of the priest
including decrees of registration, Cheong Boo stated that he was were addressed more to the elders than to the participants, it is likewise
married to the Mora Adong while as late as 1918, he gave written true that the Chinaman and the Mora woman did in fact take each other
consent to the marriage of his minor daughter, Payang. to be husband and wife and did thereafter live together as husband and
8. Notwithstanding the insinuation of counsel for the Chinese appellant wife.
that the custom is prevalent among the Moros to favor in their 11. It would be possible to leave out of view altogether the two sections
testimony, a relative or friend, especially when they do not swear on of the Marriage Law which have just been quoted and discussed. The
the Koran to tell the truth, it seems to us that proof could not be more particular portion of the law which, in our opinion, is controlling, is
convincing of the fact that a marriage was contracted by the Chinaman section IX, reading as follows: "No marriage heretofore solemnized
Cheong Boo and the Mora Adong, according to the ceremonies of the before any person professing to have authority therefor shall be invalid
Mohammedan religion. for want of such authority or on account of any informality,
irregularity, or omission, if it was celebrated with the belief of the
Ruling as to second issue parties, or either of them, that he had authority and that they have been
9. Section V of the Marriage Law provides that "Marriage may be lawfully married."
solemnized by either a judge of any court inferior to the Supreme 12. The judge a quo did not believe that the above-quoted provision of
Court, justice of the peace, or priest or minister of the Gospel of any law did not mean to validate marriages between Mohammedians.
denomination . . ." Counsel, failing to take account of the word 13. What authority there is for this statement, we cannot conceive. To our
"priest," and only considering the phrase "minister of the Gospel of mind, nothing could be clearer than the language used in section IX.
 Note for a moment the all embracing words found in this section:
a. "No marriage" — Could more inclusive words be found?
"Heretofore solemnized" — Could any other construction
than that of retrospective force be given to this phrase?
"Before any person professing to have authority therefor shall
be invalid for want of such authority" — Could stronger
language than this be invoked to announce legislative
intention? "Or on account of any informality, irregularity, or
omission" — Could the legislative mind frame an idea which
would more effectively guard the marriage relation against
technicality? "If it was celebrated with the belief of the parties,
or either of them, that he had authority and that they have been
lawfully married" — What was the purpose of the legislator
here, if it was not to legalize the marriage, if it was celebrated
by any person who thought that he had authority to perform
the same, and if either of the parties thought that they had been
married? Is there any word or hint of any word which would
restrict the curative provisions of section IX of the Marriage
Law to Christian marriages? By what system of mental
gymnastics would it be possible to evolve from such precise
language the curious idea that it was restricted to marriages
performed under the Spanish law before the revolutionary
authorities?
14. Section IX of the Marriage Law is in the nature of a curative provision
intended to safeguard society by legalizing prior marriages. We can
see no substantial reason for denying to the legislative power the right
to remove impediments to an effectual marriage. If the legislative
power can declare what shall be valid marriages, it can render valid,
marriages which, when they took place, were against the law. Public
policy should aid acts intended to validate marriages and should retard
acts intended to invalidate marriages.
15. We regard the evidence as producing a moral conviction of the
existence of the Mohammedan marriage. We regard the provisions of
section IX of the Marriage law as validating marriages performed
according to the rites of the Mohammedan religion.
 002 RAMIREZ v. GMUR (Buenaventura) was born. When they were already married, Carmen Maria was born and then
August 5, 1918 | Street, J. | Marriage, divorce Esther. On October 6, 1910, Leona Castro died.
PETITIONER: estate of Samuel Werthmuller, Ana Ramirez (executrix) The claims of both sets of children are founded upon the contention that Leona
RESPONDENTS: Otto Gmur (guardian of as guardian of the minors Esther Castro was the recognized natural daughter of Samuel Bischoff and that as such
Renate Mory, Carmen Maria Mory, and Leontina Elizabeth, she would, if living, at the time of her father's death, have been a forced heir of
his estate and would have been entitled to participate therein to the extent of a
SUMMARY: Samuel Bischoff Werthmuller, native of the Republic of one-third interest. Ana M. Ramirez, as the widow of Samuel Bischoff insists
Switzerland, but for many years a resident of the Philippines, died in Iloilo on that Leona Castro had never been recognized at all by Samuel Bischoff.
June 29, 1913, leaving a valuable estate of which he disposed by will. A few Kauffman insists that all three of the Mory children are the offspring of
days after his demise the will was offered for probate in the CFI of Iloilo and adulterous relations, and that the von Kauffman children alone are entitled to
was duly allowed and established by the court. His widow, Doña Ana M. participate in the division of such part of the estate of Samuel Bischoff as would
Ramirez, was named as executrix in the will, and letters testamentary were have been inherited by their mother.
issued to her. By the will everything was given to Ramirez with the exception of The issues are WoN Leona Castro is a recognized daughter of Samuel
a piece of real property located in the City of Thun, Switzerland, which was Werthmuller - SC held Yes, Samuel Bischoff tacitly recognized Leona a his
devised to the testator's brothers and sisters. daughter and treated her as such as proved by her baptismal entry
The first cause of the will contains a statement to the effect that inasmuch as the WoN the divorce obtained by Mr. Kauffman is valid. -SC held no. It is
testator had no children from his marriage with Ana M. Ramirez he was established by the great weight of authority that the court of a country in which
therefore devoid of forced heirs. In making this statement the testator ignored neither of the spouses is domiciled and to which one or both of them may resort
the possible claims of two sets of children, born to his natural daughter, Leona merely for the purpose of obtaining a divorce has no jurisdiction to determine
Castro. their matrimonial status; and a divorce granted by such a court is not entitled to
Leona Castro as appears from her original baptismal entry made in the church recognition elsewhere. The voluntary appearance of the defendant before such a
record of Bacolod, was born in that pueblo, her mother being Felisa Castro, and tribunal does not invest the court with jurisdiction. To give a court jurisdiction
father "unknown." Upon the margin of this record there is written in Spanish an on the ground of the plaintiff’s residence in the State or country of the judicial
additional annotation of the following tenor: "According to a public document forum, his residence must be bona fide.
(escritura) which was exhibited, she was recognized by Samuel Bischoff on Thus, only the Kauffman children are legal offspring of Leona and are entitled
June 22, 1877." to participate in the estate proceedings.
In 1895 Leona Castro was married to Frederick von Kauffman, a British lived in
the city of Iloilo and they had three children. In 1899, Leona Castro was taken DOCTRINE:
to the City of Thun, Switzerland, for the purpose of recuperating her health. She If a spouse leaves the family domicile and goes to another State for the sole
was there placed in a sanatorium (Google search: synonym of hospital). purpose of obtaining a divorce, and with no intention of remaining, his
Kauffman returned to the Philippines and Leona Castro continued to remain in residence there is not sufficient to confer jurisdiction on the courts of that State.
Switzerland. A few years later Leona informed her husband that she desired to This is especially true where the cause of divorce is one not recognized by the
remain free and would not resume life in common with him. In 1904, Mr. laws of the State of his own domicile.
Kauffman went to the City of Paris, France and obtained a divorce decree on
January 5, 1905, in favor of him and against his wife, Leona, in default. Though
the record recites that Leona was then in fact residing at No. 6, Rue Donizetti, FACTS:
Paris, there is no evidence that she had acquired a permanent domicile in that
city. 1. Samuel Bischoff Werthmuller, native of the Republic of Switzerland, but for
Leona Castro became attracted to Dr. Ernest Emil Mory, the physician in charge many years a resident of the Philippines, died in Iloilo on June 29, 1913,
of the sanatorium in Switzerland where she was placed, and soon after the leaving a valuable estate of which he disposed by will. A few days after his
decree of divorce was entered, Doctor Mory and Leona Castro went to London, demise the will was offered for probate in the CFI of Iloilo and was duly
England, and on May 5, 1905, in the registrar's office in the district of allowed and established by the court. His widow, Doña Ana M. Ramirez, was
Westminster, went through the forms of a marriage ceremony. Prior to the named as executrix in the will, and letters testamentary were issued to her.
celebration of this ceremony of marriage a daughter, named Leontina Elizabeth, By the will everything was given to the widow, with the exception of a piece
 of real property located in the City of Thun, Switzerland, which was devised 8. Prior to the celebration of this ceremony of marriage a daughter, named
to the testator's brothers and sisters. Leontina Elizabeth, had been born to Doctor Mory and Leona Castro, in
2. The first cause of the will contains a statement to the effect that inasmuch as Thun, Switzerland. When they were already married, Carmen Maria was born
the testator had no children from his marriage with Ana M. Ramirez he was and then Esther. On October 6, 1910, Leona Castro died.
therefore devoid of forced heirs. In making this statement the testator ignored 9. Otto Gmur has appears as the guardian of the three Mory claimants, while
the possible claims of two sets of children, born to his natural daughter, Leona Frederick von Kauffman has appeared as the guardian of his own three
Castro. children.
3. Leona Castro as appears from her original baptismal entry made in the church 10. The claims of both sets of children are founded upon the contention that
record of Bacolod, was born in that pueblo, her mother being Felisa Castro, Leona Castro was the recognized natural daughter of Samuel Bischoff and
and father "unknown." Upon the margin of this record there is written in that as such she would, if living, at the time of her father's death, have been a
Spanish an additional annotation of the following tenor: "According to a forced heir of his estate and would have been entitled to participate therein to
public document (escritura) which was exhibited, she was recognized by the extend of a one-third interest. Ana M. Ramirez, as the widow of Samuel
Samuel Bischoff on June 22, 1877." This annotation as well as the original Bischoff insists that Leona Castro had never been recognized at all by Samuel
entry is authenticated by the signature of Father Ferrero, whose deposition Bischoff.
was taken in this case. He testifies that the word "escritura" in this entry 11. In behalf of Leontina, the oldest of the Mory claimants, being originally the
means a public document; and he says that such document was exhibited to illegitimate daughter of Doctor Mory and Leona Castro, she was legitimated
him when the marginal note which has been quoted was added to the by their subsequent marriage. In behalf of Carmen Maria and Esther Renate,
baptismal record and supplied the basis for the annotation in question. the two younger of the Mory claimants, it is argued that the bonds of
4. As the years passed Leona Castro was taken into the family of Samuel matrimony which united Frederick von Kauffman and Leona Castro were
Bischoff and brought up by him and his wife as a member of the family; dissolved by the decree of divorce granted by the Paris court on January 5,
Samuel Bischoff tacitly recognized Leona a his daughter and treated her as 1905; that the marriage ceremony which was soon thereafter celebrated
such. between Doctor Mory and Leona in London was in all respects valid; and that
5. In 1895 Leona Castro was married to Frederick von Kauffman, a British lived therefore these claimants are to be considered the legitimate offspring of their
in the city of Iloilo. They had three children; Elena, Federico, and Ernesto. In mother.
1899, Leona Castro was taken by her husband from Iloilo to the City of Thun, 12. In behalf of the children of Frederick von Kauffman it is insisted that the
Switzerland, for the purpose of recuperating her health. She was there placed decree of divorce was wholly invalid, that all three of the Mory children are
in a sanitarium. the offspring of adulterous relations, and that the von Kauffman children, as
6. Kauffman returned to the Philippines and Leona Castro continued to remain the legitimate offspring of Leona Castro, are alone entitled to participate in
in Switzerland. A few years later Leona informed her husband that she the division of such part of the estate of Samuel Bischoff as would have been
desired to remain free and would not resume life in common with him. In inherited by their mother, if living.
1904, Mr. Kauffman went to the City of Paris, France, for the purpose of ISSUE:
obtaining a divorce from his wife under the French laws; and there is 1. WoN Leona Castro is a recognized daughter of Samuel Werthmuller. -YES,
submitted in evidence in this case a certified copy of an extract from the Samuel Bischoff tacitly recognized Leona a his daughter and treated her as
minutes of the CFI of the Department of the Seine, from which it appears that such as proved by her baptismal entry
a divorce was there decreed on January 5, 1905, in favor of Mr. Kauffman 2. WoN the divorce obtained by Mr. Kauffman is valid. – NO, their marriage
and against his wife, Leona, in default. Though the record recites that Leona was under Philippine law and the divorce decree from Paris cannot be
was then in fact residing at No. 6, Rue Donizetti, Paris, there is no evidence recognized since they were never domiciled there.
that she had acquired a permanent domicile in that city.
7. Leona Castro had become attracted to Dr. Ernest Emil Mory, the physician RULING: So much of the judgment entered in the Court of First Instance, pursuant
in charge of the sanatorium in Switzerland where she was originally placed, to the decision of Judge Mariano of December 29, 1915, as admits Leontina
and soon after the decree of divorce was entered, Doctor Mory and Leona Elizabeth Mory to participate in the estate of Samuel Bischoff is reversed; and
Castro went to London, England, and on May 5, 1905, in the registrar's office instead the von Kauffman children will be admitted to share equally in one-third of
in the district of Westminster, went through the forms of a marriage the estate as provided in the decision of Judge Powell of November 14, 1916. In
ceremony.
other respects the judgment of Judge Mariano is affirmed. The costs of this instance 7. With reference to the right of the von Kauffman children, it is enough to say
will be paid out of the estate. So ordered. that they are legitimate children, born to their parents in lawful wedlock; and
they are therefore entitled to participate in the inheritance which would have
RATIO: devolved upon their mother, if he had survived the testator.
8. As regards the Mory claimants, it is evident that their rights principally
1. We are of the opinion that the status of Leona Castro as recognized natural depend upon the effect to be given by this court to the decree of divorce
daughter of Samuel Bischoff is fully and satisfactorily shown. It is proved granted to von Kauffman by the CFI of Paris. If this decree is valid, the
that prior to her marriage with Frederick von Kauffman she was in an subsequent marriage of Doctor Mory and Leona Castro must also be
uninterrupted enjoyment of the de facto status of a natural child and was conceded to be valid; and as a consequence the two younger children, born
treated as such by Samuel Bischoff and his kindred. The proof of tacit after said marriage, would be the legitimate offspring of their mother, and
recognition is full and complete. would be entitled to participate in their mother's portion of Mr. Bischoff's
2. From the memorandum made by Padre Ferrero in the record of the birth, as estate. With respect to Leontina Elizabeth, the older one of the Mory
well as from the testimony of this priest, taken upon the deposition, it also claimants, there would in the case still be the insuperable obstacle which
appears that Samuel Bischoff had executed a document, authenticated by a results from the fact that she was the offspring of adulterous intercourse and
notarial act, recognizing Leona as his daughter. The original document itself a such was incapable of legitimation (art. 119, Civil Code).
was not produced in evidence but it is shown that diligent search was made 9. We are of the opinion that the decree of divorce upon which reliance is placed
to discover its whereabouts, without avail. The memorandum in the baptismal by the representation of the Mory children cannot be recognized as valid in
record itself constitutes original and substantive proof of the facts therein the courts of the Philippine Islands. The French tribunal has no jurisdiction
recited. to entertain an action for the dissolution of a marriage contracted in these
3. It will be observed that the recognition of Leona Castro as the daughter of Islands by person domiciled here, such marriage being indissoluble under the
Samuel Bischoff occurred prior to the date when the Civil Code was put in laws then prevailing in this country.
force in these Islands; and consequently her rights as derived from the 10. The evidence shows that Frederick von Kauffman at all times since earliest
recognition must be determined under the law as it then existed, that is, under youth has been, and is now, domiciled in the city of Iloilo in the Philippines;
Law 11 of Toro, which afterwards became Law 1, title 5, book 10, of that he there married Leona Castro, who was a citizen of the Philippines, and
the Novisima Recopilacion. Under that law recognition could be established that Iloilo was their matrimonial domicile; that his departure from iloilo for
by proof of acts on the part of the parent unequivocally recognizing the status the purpose of taking his wife to Switzerland was limited to that purpose
of his offspring. In other words a tacit recognition was sufficient. Under alone, without any intent to establish a domicile elsewhere; and finally that
article 131 of the present Civil Code, the acknowledgment of a natural child he went to Paris in 1904, for the sole purpose of getting a divorce, without
must be made in the record of birth, by will, or in other public instrument. any intention of establishing a permanent residence in that city.
We are of the opinion that the recognition of Leona Castro is sufficiently 11. The evidence shows that the decree was entered against the defendant in
shown whether the case be judged by the one provision or the other. default, for failure to answer, and there is nothing to show that she had
4. But it is contended by counsel for Doña Ana Ramirez that only children born acquired, or had attempted to acquire, a permanent domicile in the City of
of persons free to marry may possess the status of recognized natural Paris. It is evident of course that the presence of both the spouses in that city
children, and there is no evidence to show that Felisa Catro was either a single was due merely to the mutual desire to procure a divorce from each other.
woman or widow at the time of the conception or birth of Leona. 12. It is established by the great weight of authority that the court of a country
5. The contrary presumption would be that Felisa Castro was guilty of adultery, in which neither of the spouses is domiciled and to which one or both of
which cannot be entertained. If such had in fact been the case, the burden of them may resort merely for the purpose of obtaining a divorce has no
proving it would have been upon the persons impugning the recognition of jurisdiction to determine their matrimonial status; and a divorce
the child by her father. granted by such a court is not entitled to recognition elsewhere. The
6. From the fact that Leona Castro was an acknowledged natural daughter of voluntary appearance of the defendant before such a tribunal does not invest
her father, it follows that had she survived him she would have been his the court with jurisdiction.
forced heir, he having died after the Civil Code took effect and as such forced 13. It follows that, to give a court jurisdiction on the ground of the plaintiff's
heir she would have been entitled to one-third of the inheritance. residence in the State or country of the judicial forum, his residence must
be bona fide. If a spouse leaves the family domicile and goes to another State
 for the sole purpose of obtaining a divorce, and with no intention of
remaining, his residence there is not sufficient to confer jurisdiction on the
courts of that State. This is especially true where the cause of divorce is one
not recognized by the laws of the State of his own domicile.
14. Until the adoption of Act No. 2710 by the Philippine Legislature, it had been
the law of these Islands that marriage, validly contracted, could not be
dissolved absolutely except by the death of one of the parties; and such was
the law in this jurisdiction at the time when the divorce in question was
procured. The Act to which we have referred permits an absolute divorce to
be granted where the wife has been guilty of adultery or the husband of
concubinage. But inasmuch as the tenets of the Catholic Church absolutely
deny the validity of marriages where one of the parties is divorced, it is
evident that the recognition of a divorce obtained under the conditions
revealed in this case would be as repugnant to the moral sensibilities of our
people as it is contrary to the well-established rules of law.
15. As the divorce granted by the French court must be ignored, it results that the
marriage of Doctor Mory and Leona Castro, celebrated in London in 1905,
could not legalize their relations; and the circumstance that they afterwards
passed for husband and wife in Switzerland until her death is wholly without
legal significance. The claims of the Mory children to participate in the estate
of Samuel Bischoff must therefore be rejected.
16. The rights of forced heirs to their legitime are not divested by the decree
admitting a will to probate, — and this regardless of the fact that no provision
has been made for them in the will, for the decree of probate is conclusive
only a regards the due execution of the will, the question of its intrinsic
validity not being determined by such decree.
17. Indeed it is evident, under the express terms of the proviso to section 753 of
the Code of Civil Procedure, that the forced heirs cannot be prejudiced by the
failure of the testator to provide for them in his will; and regardless of the
intention of the testator to leave all his property, or practically all of it, to his
wife, the will is intrinsically invalid so far a it would operate to cut off their
rights.
18. Our conclusion is that the application of the von Kauffman children was
presented in ample time and that the judgment entered in their favor by Judge
Powell was correct. The Mory claimants, as already stated, are debarred from
participation in the estate on other grounds.
 003 HIX v. FLUEMER (Jabo) by mutual consent, and then returns to said matrimonial domicile after obtaining
March 21, 1931 | Villareal, J. | Registration of transfer of shares a divorce, continues residing therein and engaging in business, is not bona fide
residence, and does not confer jurisdiction upon the court even if he alleges in the
PETITIONER: INTESTATE ESTATE OF THE LATE E. RANDOLPH HIX. complaint for divorce that he intends to reside permanently in said state;
ANNIE COUSINS HIX, PETITIONER
[NOTE: This case is an appeal of the previous case we discussed Fluemer v. Hix,
RESPONDENTS: A. W. FLUEMER, OPPONENT AND APPELLEE which concerns the intestate proceedings of the estate of deceased Hix]

SUMMARY: Randolph Hix was born in South Carolina USA. Then he FACTS:
transferred to the Philippines to work as a coal expert for the government. He
married Annie Cousins in Shanghai China, then they returned to the Philippines 1. The petitioner Annie Cousins Hix, appeals from the order issued by the
to live there permanently. They bore a son, Preston. Annie left for Canada to Court of First Instance of Manila in the course of the intestate proceedings
receive medical treatment. However, the couple separated shortly thereafter. of E. Randolph Hix, stating that the divorce decree granted by the Circuit
Annie instituted an action for support against Hix. Hix then, went to West Court of Randolph County of the State of West Virginia awarding the
Virginia leaving his wife and child, for the purpose of residing there and suing deceased Hix a divorce from his wife, Annie Cousins Hix, is valid in this
for a divorce. A complaint was filed, but as Annie was not a resident of West jurisdiction; that since the latter is legally divorced from her late husband, she
Virginia, she was summoned through publications, but she did not enter her is not entitled to the pension she asks as his widow;
appearance. West Virgina court granted said divorce. Issue is whether or not the
divorce obtained by Hix is valid. NO. SC held that it is void. One of the 2. E. Randolph Hix was born in the year 1866 in Union, South Carolina, where
conditions for the validity of a decree of absolute divorce is that the court he lived with his parents until the age of 15.
granting it has acquired jurisdiction over the subject matter, and to this end the a. They then removed to Rye, Westchester County, New York.
plaintiff must be domiciled in good faith, and for the length of time fixed by b. A few years later, he was sent to the University of Lehigh, and to
the law, in the state in which it was granted. E. Randolph Hix was domiciled the Massachusetts Institute" of Technology, leaving the latter before
in the City of Manila where he lived apart from his wife and child, by mutual graduating, to accept employment with the Edison Company where
consent, and here he had his business. He re-moved to the State of West he worked lot about three years.
Virginia leaving his aforesaid wife and child and his business behind, for the c. After resigning from his position he opened an office and engaged
purpose of obtaining an absolute divorce, which he did in 1925, returning in the in private work as consulting engineer and contractor until the year
year 1927 to reside in the City of Manila, and continuing his business. E. 1895, when he removed to Wheeling, West Virginia, to engage in
Randolph Hix went to West Virginia without the intention of residing there the general engineering business as a member of the firm of Hogg
permanently. Such an intention was contradicted by the fact that before leaving & Hix, surveyors.
the City of Manila, he did not liquidate his business but placed it under the
management of said opponent, and once having obtained his divorce, he 3. After fifteen years of residence in Wheeling, he took an examination and
returned to the City of Manila to take up his residence and to continue his received an appointment as coal expert for the Philippine Government,
aforesaid business, and that his purpose in going to West Virginia was to obtain arriving at Manila some time during the year 1910.
a divorce. It has already been held that the court of a country in which neither a. While E. Randolph Hix was living in Manila in 1912, he met the
of the spouses is domiciled and to which one or both of them may resort merely appellant and married her in Shanghai, China, on or about June 24,
for the purpose of obtaining a divorce has no jurisdiction to determine their 1913, returning to Manila where they established their domicile.
matrimonial status, and the divorce granted by such a court is not entitled to b. A son was born of this union in Boston, Massachusetts, on July 1,
recognition here. 1915, named Preston Randolph Hix, while she was in the United
States where she had gone on the month of May of the same year to
DOCTRINE: That the residence acquired in a state of the American Union by a visit her family and the mother and sister of her husband.
husband, who, for the purpose of obtaining a divorce, abandons the country c. The appellant returned to Manila in November, 1916, and continued
wherein are his matrimonial domicile and his wife, who is living apart from him to live with the deceased as husband and wife.
 8. In the month of May, 1925, that is, one year after his arrival at Elkins, West
4. On March 16, 1919, the appellant Annie left for Canada, where she remained Virginia, the deceased filed a complaint for a divorce with the Circuit
with their child until February, 1921, when she returned to Manila in a very Court of Randolph County, West Virginia, alleging, among other things,
precarious condition of health and was given medical treatment in the St. a. that he was a citizen of the United States of America, and of the
Paul's Hospital at the expense of her husband. State of West Virginia, and had been for more than one year prior
a. After she regained her health, she lived apart from her husband by to the date of the institution of the suit, an actual bona fide citizen
mutual consent. and resident of Randolph County, West Virginia;
b. that Annie Cousins Hix was a resident of the City of Pekin, China;
5. On December 7, 1922, the appellant Annie instituted an action in the Court c. that on December 1, 1921, his wife had abandoned and deserted
of First Instance of Manila against her husband, E. Randolph Hix, for the him, taking up a separate residence and declining to live or have
purpose of compelling him to provide adequate support for herself and her anything to do with him;
son, Preston Randolph Hix. d. that he, Hix, freely, voluntarily, and adequately supported his wife
a. It is stipulated and agreed that the defendant and plaintiff are both and child, paying her the sum of $175 per month;
residents of the City of Manila; e. that he intended to reside permanently in the United States, and that
b. that they were married on the 24th day of June, 1913, in Shanghai, it was with such intention that he had returned to West Virginia;
China; that plaintiff is the lawful wife of defendant; f. that he and his wife had been living apart for three years, and that
c. that one son named Preston R. Hix was born on July 1, 1915, of she had rejected his offer of reconciliation.
the said marriage, who is still living;
d. that plaintiff and defendant are now and have been, since about the 9. As the appellant was not a resident of the State of West Virginia, she was
middle of December, 1921, living separate and apart from each summoned upon the complaint for divorce by publication, and not having
other by mutual consent, though the greater part of the time since entered an appearance in the case, either personally or by counsel within the
December, 1921, up to November, 1922, they took their meals term fixed, the Circuit Court of Randolph County, West Virginia, rendered
together; judgment against her in 1925 declaring her marriage with the plaintiff
e. that by mutual consent they will continue to live apart from each dissolved.
other; a. Having procured the divorce, E. Randolph Hix returned to Manila
f. that as long as the child will remain in the Philippine Islands, the in 1927, where he continued to live and engaged in business up to
father will have the opportunity to see him twice a week, this the time of his death in the year 1929.
without prejudice of Mrs. Hix taking the child to the States.
g. In this case, she will keep the father informed as to the condition of
the child by writing him once a month. ISSUE: W/N the divorce obtained by E. Randolph Hix in the State of Virginia, U.S.A
was valid? NO. One of the conditions for the validity of a decree of absolute divorce
6. The trial court adjudicated the case in her favor and ordered the defendant is that the plaintiff must be domiciled in good faith in the state in which it was granted.
E. Randolph Hix to pay her the sum of P500 in advance on or before the 5th Because E. Randolph Hix was not domiciled in the State of Virginia, but rather in the
day of each month for the maintenance of herself and her son. Philippines, the courts of the State of Virginia did not have jurisdiction over the subject
matter and thus the divorce decree is void
7. During the month of December, 1922, while the proceedings in said case
were pending, the office held by E. Randolph Hix in the Government was
abolished, and he went into private practice, acting as coal expert for the RULING: Wherefore, the judgment appealed from is reversed, and it is held that
Manila Electric Company and other private concerns until March, 1924, the decree of divorce issued by the Circuit Court of Randolph County, West
when he left for West Virginia, leaving his wife and child in Manila, and his Virginia, is null and void in this jurisdiction, with costs against the appellee. So
business in the hands of his employee, A. W. Fluemer, the opponent and ordered.
appellee, for the purpose of residing there and suing for a divorce.
RATIO:
1. The first question to decide in this appeal, raised by the first two assignments 5. Although the opponent and appellee attempted to show that E. Randolph Hix
of error is, whether the Circuit Court of Randolph County in West Virginia went to West Virginia with the intention of residing there permanently, as
acquired jurisdiction to take cognizance of the complaint for divorce filed by alleged in the complaint for divorce, such an intention was contradicted by
E. Randolph Hix and to render a valid and binding judgment against the the fact that before leaving the City of Manila, he did not liquidate his
petitioner and appellant, Annie Cousins Hix. business but placed it under the management of said opponent, and once
having obtained his divorce, he returned to the City of Manila to take up his
2. The pertinent part of section 306 of the Code of Civil Procedure provides residence and to continue his aforesaid business, and that his purpose in going
as follows to West Virginia was to obtain a divorce.
a. "SEC. 306. EFFECT OF JUDGMENT.—The effect of a judgment or final order in
an action or special proceeding before a court or judge of the Philippine Islands
6. In Gorayeb vs. Hashim, this court laid down the following doctrine:
or of the United States, or of any State or Territory of the United States, having
jurisdiction to pronounce the judgment or order, may be a.s follows: a. NULLITY OF DIVORCE.—Doctrine of Ramirez vs. Gmur
In case of a judgment or order against a specific thing, or in respect to the probate followed, to the effect that the court of a country in which neither
of a will, or the administration of the estate of a deceased person, or in respect to of the spouses is domiciled and to which one or both of them may
the personal, political, or legal condition or relation of a particular person, the
resort merely for the purpose of obtaining a divorce has no
judgment or order is conclusive upon the title of the thing, the will or
administration, or the condition or relation of the person: jurisdiction to determine their matrimonial status, and the divorce
b. Section 334, No. 15, of said Code states: granted by such a court is not entitled to recognition here.
"SEC. 334. Disputable Presumptions.—The following presumptions are b. PHILIPPINE RESIDENTS WHO HAVE BEEN MARRIED
satisfactory, if uncontradicted, but they are disputable, and may be contradicted by ABROAD.—The foregoing rule is applicable to married people
other evidence:
"15. That a court, or judge acting as such, whether in the Philippine Islands or who are domiciled in the Philippine Islands although they may have
elsewhere, was acting in the lawful exercise of his jurisdiction.” contracted marriage elsewhere."
c. These provisions show that in order that a judgment of a court or judge of any state
of the American Union with respect to the personal or legal condition of a particular
7. This ruling has not been weakened in the present case by the fact that E.
person may be conclusive and constitute res judicata, it is essential that the court
have jurisdiction, and such jurisdiction is presumed in the absence of evidence to Randolph Hix was a citizen of the United States and of the State of West
the contrary. Virginia, since it is not the citizenship of the plaintiff for divorce which
confers jurisdiction upon a court, but his legal residence within the State
3. Section 312 of the Code of Civil Procedure provides: where he applies for a divorce.
a. "SEC. 312. How Judicial Record May be Impeached.— Any a. That E. Randolph Hix himself believed he had relinquished his
judicial record may be impeached by evidence of a want of former legal residence in West Virginia, of which he was a citizen,
jurisdiction in the court or judicial officer, of collusion between the upon establishing his marriage domicile in the City of Manila,
parties, or of fraud in the party offering the record, in respect to the Philippine Islands, is shown by the fact that he had to reestablish
proceedings." his residence in said State for the length of time fixed by the law in
order to be able to file his complaint for a divorce.
4. One of the conditions for the validity of a decree of absolute divorce is that
the court granting it has acquired jurisdiction over the subject matter, and 8. Since E. Randolph Hix was not a bona fide resident of the State of West
to this end the plaintiff must be domiciled in good faith, and for the length Virginia, the divorce decree he obtained from the Circuit Court of Randolph
of time fixed by the law, in the state in which it was granted. County, is null and void, said court having failed to acquire jurisdiction
a. E. Randolph Hix was domiciled in the City of Manila where he lived over the subject matter.
apart from his wife and child, by mutual consent, and here he had
his business. 9. But even if his residence had been taken up in good faith, and the court had
b. He removed to the State of West Virginia leaving his aforesaid wife acquired jurisdiction to take cognizance of the divorce suit, the decree issued
and child and his business behind, for the purpose of obtaining an in his favor is not binding upon the appellant;
absolute divorce, which he did in 1925, returning in the year 1927 a. for the matrimonial domicile of the spouses being the City of
to reside in the City of Manila, and continuing his business. Manila, and no new domicile having been acquired in West
Virginia, the summons made by publication, she not having entered
 an appearance in the case, either personally or by counsel, did not b. (2) that the summons by publication in a complaint for divorce,
confer jurisdiction upon said court over her person. filed in a state by the husband who has gone to said state,
abandoning his matrimonial domicile where his wife continues to
10. In Haddock vs. Haddock (201 U. S., 562), the United States Supreme Court reside, does not confer jurisdiction upon the court over the person
laid down the following doctrine: of said wife when she has not entered an appearance in the case,
a. "The husband and wife being domiciled in New York, the husband left the and the decree issued by said court dissolving the marriage is not
wife, acquired, in good faith, after a lapse of years, a domicile in binding upon her; and
Connecticut, and obtained in that State, and in accordance with its laws, a c. (3) that a decree of divorce issued by a court of any state or territory
judgment of divorce based on constructive, and not actual, service of of the American Union, or of a foreign country, may be impeached
process, on the wife, who meanwhile remained domiciled in New York in another case for lack of jurisdiction in said court over the subject
and never appeared in the action. The wife subsequently sued for divorce
matter, or over the person of the defendant, or for fraud in obtaining
in New York and obtained personal service in that State on the husband
who pleaded the Connecticut judgment. Held, it on the part of the person procuring it.
b. "Without questioning the power of the State of Connecticut to enforce the
decree within its own borders, and without intimating any doubt that the
State of New York might give it such a degree of efficacy that it might be .
entitled to in view of the public policy of the State, that the Connecticut
decree, rendered as it was without being based on personal service of the
process on, and therefore without personal jurisdiction of the court over,
the wife, was not entitled to obligatory enforcement in the State of New
York by virtue of the full faith and credit clause of the Federal Constitution.
c. "A suit for divorce brought in a State other than that of domicile or
matrimony against a wife who is still domiciled therein is not a proceeding
in rem justifying the court to enter a decree as to the res; or marriage
relation, entitled to be enforced outside of the territorial jurisdiction of the
court."

11. Without deciding whether or not clause IV of the Constitution of the United
States, with reference to the full faith and credit to be given to judgments of
the courts of the States of the American Union is applicable to the Philippine
Islands, we may say that the ruling has the same force and scope as that of
international comity, which must in any case be taken into account in
considering the recognition to be given in the Philippine Islands to judgments
of foreign courts. (Section 311, Act No. 190.)

12. For the foregoing considerations, we are of opinion and so hold:

a. (1) That the residence acquired in a state of the American Union by
a husband, who, for the purpose of obtaining a divorce, abandons
the country wherein are his matrimonial domicile and his wife, who
is living apart from him by mutual consent, and then returns to said
matrimonial domicile after obtaining a divorce, continues residing
therein and engaging in business, is not bona fide residence, and
does not confer jurisdiction upon the court even if he alleges in the
complaint for divorce that he intends to reside permanently in said
state;
 004 BARRETTO GONZALES v. GONZALES (CRUZ)
March 7, 1933 | Hull, J. | Marriage Adoption and Family Relations
FACTS:
PETITIONER: Manuela Barretto Gonzales 14. Manuela Barretto Gonzales and Agusto Gonzales are citizens of the
RESPONDENTS: Agusto C. Gonzales, Agusto C. Gonzales. Et al. Philippine Islands and at present residents of the City of Manila. They were
married in Manila on January 19, 1919, and lived together as man and wife
SUMMARY: Manuela and Agusto are Filipinos and are residents of Manila. in the Philippines until the Spring of 1926. Of this union four children were
They got married in 1919 and lived as husband and wife until 1926. They born.
voluntary separated and had an agreement that Manuela and their children will 15. They voluntarily separated and since that time have not lived together as man
get P500 monthly support and certain properties will be named after Manuela. and wife.
Thereafter, Agusto went to Reno, Nevada, and securedan absolute divorce on the 16. Negotiations between the parties continued for several months, whereupon it
ground of desertion and married another Filipina and now has three children as a was mutually agreed to allow Manuela for her support and that of her
result of that marriage. Shortly thereafter Agusto moved to California and children, five hundred pesos (P500) monthly; this amount to be increased in
returned to the Philippines in 1928 where he has since remained. Agusto, after case of illness or necessity, and the title of certain properties to be put in her
arriving to the Philippines, reduced the amount he had agreed to pay monthly for name.
the support of his wife and four minor children and has not made the payments 17. Shortly after this agreement the husband went to Reno, Nevada, and secured
fixed in the Reno divorce as alimony. Thus, Manuela brought an action with the in that jurisdiction an absolute divorce on the ground of desertion, which
CFI requesting to confirm and ratify the divorce decree issued in Nevada and to decree was dated November 28, 1927.
order Agusto to pay support agreed to. The CFI ruled in favor of Manuela. Hence 18. On the same date that he secured the divorce in Nevada, he married another
this appeal. Filipina and now has three children as a result of that marriage
19. Shortly thereafter Agusto moved to California and returned to the Philippines
The issue in this case is WoN the Reno, Nevada Divorce Decree maybe in August 1928, where he has since remained.
recognized in the Philippines – The Court ruled in the negative. The entire 20. Agusto, after arriving to the Philippines, reduced the amount he had agreed
conduct of the parties from the time of their separation until the case was to pay monthly for the support of his wife and four minor children and has
submitted to this court, in which they all prayed that the Reno divorce be ratified not made the payments fixed in the Reno divorce as alimony.
and confirmed, clearly indicates a purpose to circumvent the laws of the 21. Shortly after his return Manuela brought action in the Court of First Instance
Philippines regarding divorce and to secure a change of status for reasons and of Manila requesting that
under conditions not authorized by our law. Litigants can not compel the courts s. the courts of the Philippine confirm and ratify the decree of divorce
to approve of their own actions or permit the personal relations of Filipinos to be issued by the courts of the State of Nevada; that section 9 of Act No.
affected by decrees of divorce of foreign courts in a manner which our 271062 be enforced, and
Government believes is contrary to public order and good morals.||At all times t. that she and Agusto deliver to the guardian ad litem the equivalent
the matrimonial domicile of this couple has been within the Philippines and the of what would have been due to their children as their legal portion
residence acquired in the State of Nevada by Agusto for the purpose of securing from the respective estates had their parents died intestate on
a divorce was not a bona fide residence and did not confer jurisdiction upon the November 28, 1927.
court of that State to dissolve the bonds of matrimony u. that the community existing between Manuela and Agusto be
declared dissolved and Agusto be ordered to render an accounting
DOCTRINE: Litigants can not compel the courts to approve of their own actions and to deliver to Manuela her share of the community property,
or permit the personal relations of the citizens of these Islands to be affected by v. that Agusto be ordered to pay Manuela
decrees of divorce of foreign courts in a manner which our Government believes i. the alimony at the rate of five hundred pesos (P500) per
is contrary to public order and good morals.|| month,

62
"The decree of divorce shall dissolve the community of property as soon as such decree becomes final, legitimate children has not delivered to each of them or to the guardian appointed by the court, within said
but shall not dissolve the bonds of matrimony until one year thereafter. period of one year, the equivalent of what would have been due to them as their legal portion if said spouse
"The bonds of matrimony shall not be considered as dissolved with regard to the spouse who, having had died intestate immediately after the dissolution of the community of property."
 ii. counsel fees, the sum of five thousand pesos (P5,000), and a. Article 9: "The laws relating to family rights and duties, or to the
iii. the expenses incurred in educating the three minor sons. status, condition, and legal capacity of persons, are binding upon
22. A guardian ad litem was appointed for the minor children, and they appear Spaniards even though they reside in a foreign country."
as intervenors and join their mother in these proceedings. b. Article 11: ". . . the prohibitive laws concerning persons, their acts
23. The CFI granted judgment as prayed for by Manuela and intervenors, with and their property, and those intended to promote public order and
the exception of reducing attorneys fees to P3000 and also granted costs of good morals, shall not be rendered without effect by any foreign
the action against Agusto. laws or judgments or by anything done or any agreements entered
24. Hence, this appeal into in a foreign country."
44. It is therefore a serious question whether any foreign divorce, relating to
ISSUE/s:
citizens of the Philippines, will be recognized in this jurisdiction, except it
11. WoN the Reno, Nevada Divorce Decree maybe recognized in the Philippines
be for a cause and under conditions for which the courts of the Philippines
– NO
would grant a divorce.
RULING: The judgment of the Court of First Instance of the City of Manila must 45. The lower court in granting relief as prayed for frankly stated that the
therefore be reversed and defendant absolved from the demands made against him in securing of the divorce, the contracting of another marriage and the
bringing into the world of innocent children brings about such a condition
this action. This, however, without prejudice to any right of maintenance that plaintiff
that the court must grant relief.
and the intervenors may have against defendant. No special pronouncement as to costs.
46. The hardships of the existing divorce laws of the Philippines are well
known to the members of the Legislature. It is the duty of the courts to
RATIO:
enforce the laws of divorce as written by the Legislature if they are
39. While the parties in this action are in dispute over financial matters they are
constitutional. Courts have no right to say that such laws are too strict or
in unity in trying to secure the courts of this jurisdiction to recognize and
too liberal.
approve of the Reno divorce. On the record here presented this can not be
done. 47. Litigants by mutual agreement can not compel the courts to approve of
40. The public policy in this jurisdiction on the question of divorce is clearly set their own actions or permit the personal relations of the citizens of these
forth in Act No. 2710 (An Act to establish Divorce, and in several Islands to be affected by decrees of foreign courts in a manner which our
jurisprudence Government believes is contrary to public order and good morals.
a. Goitiavs. Campos Rueda; Garcia Valdez vs. Soteraña Tuason;
Ramirez vs. Gmur; Chereau vs. Fuentebella; Fernandez vs. De
Castro; Gorayeb vs. Hashim; Francisco vs. Tayao; Alkuino Lim
Pang vs. Uy Pian Ng Shun and Lim Tingco and the late case of
Cousins Hix vs. Fluemer.
41. The entire conduct of the parties from the time of their separation until the
case was submitted to this court, in which they all prayed that the Reno
divorce be ratified and confirmed, clearly indicates a purpose to circumvent
the laws of the Philippines regarding divorce and to secure a change of status
for reasons and under conditions not authorized by our law.
42. At all times the matrimonial domicile of this couple has been within the
Philippines and the residence acquired in the State of Nevada by Agusto for
the purpose of securing a divorce was not a bona fide residence and did not
confer jurisdiction upon the court of that State to dissolve the bonds of
matrimony in which he had entered in 1919.
43. While the decisions of this court heretofore in refusing to recognize the
validity of foreign divorce has usually been expressed in the negative and
have been based upon lack of matrimonial domicile or fraud or collusion,
The SC have not overlooked the provisions of the Civil Code.
 005 ARCA vs. JAVIER (DAGUMAN) only purpose was to impugn the claim of Alfredo that his domicile or legal
July 31, 1954 | Bautista Angelo, J. | Jurisdiction over the subject matter required for residence at that time was Mobile County, and to show that the ground of
a divorce decree to be recognized in the Philippines desertion imputed to her was baseless and false. Such answer should be
considered as a special appearance the purpose of which is to impugn the
PETITIONER: Salud R. Arca and Alfredo Javier, Jr. jurisdiction of the court over the case.
RESPONDENTS: Alfredo Javier
DOCTRINE:
SUMMARY: Alfredo, who is a Filipino, married Salud, another Filipino citizen One of the essential conditions for the validity of a decree of divorce is that the
in 1937. Before their marriage they already had a child, Alfredo Jr. In 1927, court must have jurisdiction over the subject matter. In order that this may be
Alfredo enlisted in the US Navy so he had to sail to the US in 1938, thereby acquired, plaintiff must be domiciled in good faith in the State in which the
leaving his wife and child. Afterwards, Alfredo filed an action for divorce in the divorce is granted. Jurisprudence has held that the court of a country in which
Circuit Court of Mobile County, Alabama, using abandonment as his ground for neither of the spouses is domiciled and to which one or both of them may resort
the divorce. Having received a copy of the complaint, Salud filed an answer merely for the purpose of obtaining a divorce has no jurisdiction to determine
alleging, among other things, that Alfredo was not a resident of Mobile County, their matrimonial status; and a divorce granted by such a court is not entitled to
but of Naic, Cavite, and that it was not true that the cause of their separation recognition elsewhere. Furthermore, any voluntary appearance made by the
was abandonment on her part but that it was physically impossible for them to defendant before such a tribunal does not invest the court with jurisdiction.
be together since Alfredo was in the United States because he was then enlisted
in the U.S. Navy. The court, however, decreed the dissolution of their marriage. FACTS:
ISSUE: WoN the divorce decree obtained from the US has a valid effect in 1. On November 19, 1937, Salud and Alfredo had their marriage solemnized by
Philippine jurisdiction—NO because at the time Alfredo obtained the divorce Judge Mariano Nable of the Municipal Court of Manila. At the time of their
decree, he was not a legal resident of Mobile County. RULING: One of the marriage, they had already begotten a son, Alfredo Jr., who was born on
essential conditions for the validity of a decree of divorce is that the court must December 2, 1931.
have jurisdiction over the subject matter. In order that this may be acquired, 2. Sometime in 1938, Alfredo left for the US on board a ship of the US Navy.
plaintiff must be domiciled in good faith in the State in which the divorce is Apparently, he joined the US Navy since 1927.
granted. Jurisprudence has held that the court of a country in which neither of 3. Because Alfredo went to the US, Salud, who was from Maragondon, Cavite,
the spouses is domiciled and to which one or both of them may resort merely for chose to live with Alfredo’s parents in Naic, Cavite. However, Salud’s
the purpose of obtaining a divorce has no jurisdiction to determine their personality was not compatible with that of Alfredo’s parents so she decided
matrimonial status; and a divorce granted by such a court is not entitled to to transfer her residence to Maragondon.
recognition elsewhere. Furthermore, any voluntary appearance made by the 4. Since then, Alfredo and Salud’s relationship became strained and on August
defendant before such a tribunal does not invest the court with jurisdiction. In 13, 1940, Alfredo brought an action for divorce before the Circuit Court of
this case, the divorce decree by the Circuit Court of Mobile County cannot be Mobile County, State of Alabama, USA.
recognized in the Philippines because at the time such decree was issued, 5. In her Answer, Salud averred, among others, that Alfredo was not a resident
Alfredo was not a resident of Mobile County, Alabama. Rather, he was a of the State of Alabama 12 months prior to the institution of the complaint.
resident of the Philippines. That he never intended to live there permanently is She argued, rather, that he was a resident of Naic, Cavite, Philippines.
shown by the fact that after his marriage to Thelma Francis in 1941, he moved 6. Salud further argued that it was not true that the cause of their separation was
to New York where he bought a house and a lot, and after his divorce from her desertion/abandonment. She explained that it was physically impossible
Thelma in 1949 and his retirement from the U.S. Navy, he returned to the for them to be together since Alfredo was in the US since he enlisted in the
Philippines and married Maria Odvina of Naic, Cavite, where he lived ever US Navy. She thus prayed that the divorce be dismissed. The court, however,
since. It may therefore be said that Alfredo went to Mobile County, not with the decreed the dissolution of their marriage on April 9, 1941.
intention of permanently residing there, or of considering that place as his 7. On July 1941, Alfredo married Thelma Francis, an American citizen, and he
permanent abode, but for the sole purpose of obtaining divorce from his wife. bought a house at New York.
Such residence is not sufficient to confer jurisdiction on the court. Lastly, 8. In 1949, Thelma obtained a divorce for reasons not disclosed by the evidence,
Salud’s voluntary appearance before the Circuit Court of Mobile County cannot and later on, having retired from the US Navy, Alfredo returned to the
be construed to have conferred jurisdiction upon the court. This is because its Philippines on February 13, 1950.
 9. Alfredo then married Maria Odvina before Judge Natividad Almeda-Lopez the spouses is domiciled and to which one or both of them may resort
of the Municipal Court of Manila on April 19, 1950. merely for the purpose of obtaining a divorce has no jurisdiction to
10. Salud then filed an information for bigamy again Alfredo on July 25, 1950. determine their matrimonial status; and a divorce granted by such a
However, the CFI of Manila through Judge Alejandro J. Panlilio, acquitted court is not entitled to recognition elsewhere. The voluntary appearance
Alfredo on August 10, 1951 on the ground that Alfredo’s marriage with of the defendant before such a tribunal does not invest the court with
Maria was made in good faith and in the honest belief that this marriage with jurisdiction.
Salud had been legally dissolved by the divorce decree obtained from the US. 5. It follows that, to give a court jurisdiction on the ground of the plaintiff's
residence in the State or country of the judicial forum, his residence must
ISSUES: be bona fide. If a spouse leaves the family domicile and goes to another
1. WoN the divorce decree obtained from the US has a valid effect in Philippine State for the sole purpose of obtaining a divorce, and with no intention
jurisdiction—NO because at the time Alfredo obtained the divorce decree, he of remaining, his residence there is not sufficient to confer jurisdiction
was not a legal resident of Mobile County. on the courts of the State. This is especially true where the cause of
divorce is one not recognized by the laws of the State of his own domicile.
RULING: WHEREFORE, the decision appealed from is affirmed, with costs. 6. In this case, therefore, it cannot be said that the Mobile County Court of
Alabama had acquired jurisdiction over the case. This is because at the time
RATIO: the divorce was filed by Alfredo, his legal residence was then in the
1. One of the essential conditions for the validity of a decree of divorce is Philippines. He could not have therefore acquired legal residence or domicile
that the court must have jurisdiction over the subject matter. In order at Mobile County when he moved to that place in 1938 because at that time
that this may be acquired, plaintiff must be domiciled in good faith in he was still in the service of the U.S. Navy and he merely rented a room where
the State in which the divorce is granted. he used to stay during his occasional shore leave for shift duty.
2. Most recent of such cases is Sikat vs. Canson, which involves a case of 7. That he never intended to live there permanently is shown by the fact that
divorce also based on the ground of desertion. In that case, John Canson after his marriage to Thelma Francis in 1941, he moved to New York where
claimed not only that he had legal residence in the State of Nevada, where he bought a house and a lot, and after his divorce from Thelma in 1949 and
the action was brought, but he was an American citizen, although it was his retirement from the U.S. Navy, he returned to the Philippines and married
proven that his wife never accompanied him there but has always remained Maria Odvina of Naic, Cavite, where he lived ever since. It may therefore be
in the Philippines, and so it has been held that: "it is not . . . the citizenship of said that Alfredo went to Mobile County, not with the intention of
the plaintiff for divorce which confers jurisdiction upon a court, but his legal permanently residing there, or of considering that place as his permanent
residence within the State." The court further said: "And assuming that John abode, but for the sole purpose of obtaining divorce from his wife. Such
Canson acquired legal residence in the State of Nevada through the approval residence is not sufficient to confer jurisdiction on the court.
of his citizenship papers, this would not confer jurisdiction on the Nevada 8. There was also an issue as to whether the ruling in Canson would be
court to grant divorce that would be valid in this jurisdiction, nor jurisdiction applicable in this case. To this, the Court said that the applicability of the
that could determine their matrimonial status, because the wife was still ruling in the Canson case may be justified on the ground that the Philippine
domiciled in the Philippines. The Nevada court never acquired jurisdiction courts can grant divorce only on the ground of adultery on the part of
over her person." the wife or concubinage on the part of the husband, and if the decree is
3. In this case, it is true that Salud filed an answer in the divorce case instituted predicated on another ground, that decree cannot be enforced in this
at the Mobile County in view of the summons served upon her in this jurisdiction. In other words, the courts in the Philippines can grant a divorce
jurisdiction, but this action cannot be interpreted as placing her under only on the ground of 'adultery on the part of the wife or concubinage on the
the jurisdiction of the court because its only purpose was to impugn the part of the husband' as provided for under section 1 of Act No. 2710.
claim of Alfredo that his domicile or legal residence at that time was 9. In this case, the divorce decree in question was granted on the ground of
Mobile County, and to show that the ground of desertion imputed to her desertion, which is clearly not a cause for divorce under our laws.
was baseless and false. Such answer should be considered as a special 10. This ruling is, according to the SC, sound because it is in keeping with
appearance the purpose of which is to impugn the jurisdiction of the the well-known principle of Private International Law which prohibits
court over the case. the extension of a foreign judgment, or the law affecting the same, if it is
4. Jurisprudence has held that the court of a country in which neither of contrary to the law or fundamental policy of the State of the forum. It is
also in keeping with our concept of moral values which has always looked
upon marriage as an institution. And such concept has actually crystalized
in a more tangible manner when in the new Civil Code our people, through
Congress, decided to eliminate altogether our law relative to divorce. Because
of such concept we cannot but react adversely to any attempt to extend here the
effect of a decree which is not in consonance with our customs, morals, and traditions.
 006 Wong Woo Yiu v. Martiniano Vivo (DAYU) to the law of marriage in such foreign country.
March 31, 1965 | Bautista Angelo, J. | Marriage and Family Relations
FACTS:
PETITIONER: Wong Woo Yiu alias Ng Yao 15. June 28, 1961—Board of Special Inquiry No. 3 [BSI 3] rendered decision
RESPONDENTS: Hon. Martiniano P. Vivo, etc. finding Wong Woo to be legally married to Perfecto Blas and admitting her
(Wong Woo) into the country as a non-quota immigrant.
SUMMARY: In the proceedings in BSI 3, Wong Woo Yiu declared that she came 16. July 12, 1961— Board of Commissioners [BoC] affirmed the decision. Wong
to the Phil. for the first time in 1961 to join her huband, Perfecto Blas (Filipino). Woo was duly informed in a letter sent on the same day by Secretary of the
She says they married in Chingkang, China on Jan. 15, 1929, and Chua Tio—a Board.
village leader—celebrated their marriage. BSI 3 rendered decision admitting her 17. June 18, 1962—same Board of Commisioners (but composed entirely of a
into the country as a non-quota immigrant. BoC affirmed decision. BoC New new set of members) [BoC New] rendered a new decision reversing that of
reversed BSI 3 decision and ordered Wong Woo to be excluded from the country. BSI 3 and ordering Wong Woo to be excluded from the country.
Issue: W/N Wong Woo Yiu and Perfecto’s marriage is valid—NO, 18. Aug. 9, 1962—Wong Woo filed MNT requesting an opportunity to clarify
SC ruled that not only is there no documentary evidence to support the alleged certain points taken in the decision. à Denied for lack of merit.
marriage of Wong Woo to Perfecto, but the record is punctured with so many 19. Sept. 14, 1962—Wong Woo initiated instant petition for mandamus with
inconsistencies which cannot but lead one to doubt their veracity concerning the preliminary injunction before CFI Manila.
pretended marriage in China in 1929—Perfect himself admitted in a hearing 20. Respondents [names weren’t mentioned] filed their answer, and after parties
conducted by a board of special inquiry in connection with his entry on January had submitted written stipulation of facts, attaching some documentary
23, 1947, that he was married to one Wong Woo in Chingkang, China in 1936 his evidence, the court rendered decision granting in toto the relief prayed for.
first visit there being in 1935; he could not therefore have been married to 21. Court declared the decision rendered by BSI 3 valid, while it restrained
herein applicant in 1929. Moreover, Art. 15 CC provides that laws relating to respondents from excluding Wong Woo from the country.
family rights of the status of persons are binding upon citizens of the Philippines, 22. Respondents interposed present appeal.
even though living abroad. In 1929, a marriage celebrated in the Philippines must
be solemnized either by a judge of a court inferor to the SC, a justice of the peace, ISSUE/s:
or a priest or minister of the gospel of any denomination duly registered in the 13. WoN Wong Woo and Perfecto’s marriage is valid—NO, our law only
Philippine Library and Museum in order to be valid. Even assuming that the recognizes a marriage celebrated before any of the officers mentioned, and a
marriage of Wong Woo to Perfecto before a village leader is valid in China, the village leader is not one of them
same is not one of those authorized in our country. In the absence of proof of the
law of a foreign country on a marriage celebrated there, it should be presumed that RULING: WHEREFORE, the decision appealed from is reversed. Petition for
it is the same as our own. Since our law only recognizes a marriage celebrated mandamus is dismissed
before any of the officers mentioned, and a village leader is not one of them, a
marriage so celebrated in a foreign country cannot be recognized in this RATIO:
jurisdiction, in the absence of proof of the foreign law on such marriages. 18. It appears that in BSI 3 proceedings, Wong Woo declared that she came to
the Phil. in 1961 for the first time to join her husband, Perfector Blas, to
DOCTRINE: whom she was married in Chingkang, China on Jan. 15, 1929. They had
An alien woman is properly denied admission to the Philippines where the only several children, all of whom are now in the Phil. Chua Tio—a village
basis in support of her claim that she is the wife of a Philippine citizen is a mass leader, celebrated their marriage.
of oral and documentary evidence bereft of substantial proof of husband-wife 19. BSI 3 rendered a decision finding Wong Woo legally married to Perfecto
relationship. Blas (a Filipino citizen) and admitted her into the country as a non-quota
immigrant. BoC affirmed this decision.
No validity can be given to the contention that a marriage contracted outside of 20. But, in a motu proprio decision rendered by BoC New, they found that Wong
the Philippines, which is valid under the law of the country in which it was Woo’s claim that she is the lawful wife of Perfecto was without basis in
celebrated, is also valid in the Philippines where no proof was presented relative evidence as it was “bereft of substantial proof of husband-wife relationship”
21. BoC New further held that, in the entry proceedings of Perfecto on Jan. 23, 28. It may be contended that under Sec. 4 of Gen. Order No. 68, as reproduced
1947, he declared that he first visited China in 1935 and married Wong Woo in Sec. 19 of Act. No. 3613, which is now Art. 71 of CC, a marriage
in 1936. It could not possibly sustain her claim that she married Perfecto in contracted outside of the Philippines which is valid under the law of the
1929. country in which it was celebrated is also valid in the Philippines. But, no
22. In an affidavit dated Aug. 9, 1962, Perfecto claimed that he went to China in validity can be given to this contention because no proof was presented
1929, 1935, and 1941, although in his re-entry declaration he admitted that relative to the law of marriage in China.
he first went to China in 1935, then in 1937, 1939, and lastly in 1941. He 29. Such being the case, we should apply the general rule that in the absence of
likewise claimed that he first went to China when he was merely 4 years proof of the law of a foreign country, it should be presumed that it is the same
old—computed from his date of birth in 1908 it must have been in 1912. as our own.
23. In view of the discrepancies found in the statements made by Wong Woo and 30. “The statutes of other countries or estates must be pleaded and proved the
her alleged husband Perfecto in the several investigations conducted by the same as any other fact. Courts cannot take judicial notice of what such laws
immigration authorities concerning their alleged marriage before a village are. In the absence of pleading and proof the laws of a foreign country or state
leader in China in 1929, coupled with the fact that the only basis in support will be presumed to be the same as our own.”
of Wong Woo’s claim that she is the lawful wife of Perfecto is “a mass of 31. “In the absence of anything to the contrary as to the character of a foreign
oral and documentary evidence bereft of substantial proof of husband-wife law, it will be presumed to be the same as the domestic law on the same
relationship,” the BoC New motu proprio reviewed the record concerning the subject.”
admission of Wong Woo into the country resulting in its finding that she was 32. “In the absence of evidence to the contrary foreign laws on a particular
improperly admitted. subject are presumed to be the same as those of the Philippines.”
24. Thus, BoC New made the following comment: “The only basis in support of 33. Since our law only recognizes a marriage celebrated before any of the officers
the claim that she is the wife of Perfecto Blas is a mass of oral and mentioned therein, and a village leader is not one of them, it is clear that
documentary evidence bereft of substantial proof of husband-wife Wong Woo’s marriage, even if true, cannot be recognized in this jurisdiction.
relationship. She relies on the records of Perfecto Blas in connection with his
cancellation case and the testimony of the supposed children in the previous
admission proceeding. But this claim is belied by the admission of Perfecto
Blas himself, in the hearing conducted by a board of special inquiry in
connection with his entry on January 23, 1947, that he was married to one Ng
Yo [Wong Woo] in Ki Say, Chingkang, China in 1936 his first visit there
being in 1935; he could not therefore have been married to herein applicant
in 1929.”
25. Indeed, not only is there no documentary evidence to support the alleged
marriage of Wong Woo to Perfecto, but the record is punctured with so many
inconsistencies which cannot but lead one to doubt their veracity concerning
the pretended marriage in China in 1929.
26. This claim cannot also be entertained under our law on family relations. Art.
15 CC provides that laws relating to family rights of the status of persons are
binding upon citizens of the Philippines, even though living abroad, and it is
well-know that in 1929 in order that a marriage celebrated in the Philippines
may be valid it must be solemnized either by a judge of a court inferor to the
SC, a justice of the peace, or a priest or minister of the gospel of any
denomination duly registered in the Philippine Library and Museum.
27. Even if we assume that the marriage of Wong Woo to Perfecto before a
village leader is valid in China, the same is not one of those authorized in our
country.
 TENCHAVEZ vs. ESCANO (Eleazar) other than the lawful husband entitle the latter to a decree of legal
November 29, 1965 | Reyes, J.B.L., J. | Marriage/Family Relations separation conformably to Philippine law;
3. That the desertion and securing of an invalid divorce decree by one
PETITIONERS: PASTOR B. TENCHAVEZ consort entitles the other to recover damages;
RESPONDENTS: VICENTA F. ESCAÑO, ET AL. 4. That an action for alienation of affections against the parents of one
consort does not lie in the absence of proof of malice or unworthy
SUMMARY: Vicenta Escaño, 27, exchanged marriage vows with Pastor motives on their part.
Tenchavez, 32, on February 24, 1948, before a Catholic chaplain. The marriage
was duly registered with the local civil registrar. However, the two were unable to FACTS:
live together after the marriage and as of June 1948, they were already estranged. 12. Missing her late afternoon classes on 24 February 1948 in the University of
Vicenta left for the United Stated in 1950. On the same year she filed a verified San Carlos, Cebu City, where she was then enrolled as a second year student
complaint for divorce against Tenchavez in the State of Nevada on the ground of of commerce, Vicenta Escaño (Vicenta), 27 years of age (scion of a well-to-
“Extreme cruelty, entirely mental in character.” A decree of divorce, “final and do and socially prominent Filipino family of Spanish ancestry and a
absolute” was issued in open court by the said tribunal. She married an American, "sheltered colegiala"), exchanged marriage vows with Pastor Tenchavez
lived with him in California, had several children with him and, on 1958, acquired (Pastor), 32 years of age, an engineer, ex-army officer and of undistinguished
American Citizenship. On 30 July 1955, Tenchavez filed a complaint in the Court stock, without the knowledge of her parents, before a Catholic chaplain, Lt.
of First Instance of Cebu, and amended on 31 May 1956, against Vicenta F. Moises Lavares, in the house of one Juan Alburo in the said city.
Escaño, her parents, Mamerto and Mena Escaño whom he charged with having 13. The marriage was the culmination of a previous love affair and was duly
dissuaded and discouraged Vicenta from joining her husband, and alienating her registered with the local civil register.
affections, and against the Roman Catholic Church, for having, through its 14. Vicenta's letters to Pastor, and his to her, before the marriage, indicate that
Diocesan Tribunal, decreed the annulment of the marriage, and asked for legal the couple were deeply in love. Together with a friend, Pacita Noel, their
separation and one million pesos in damages. Vicenta’s parents denied that they matchmaker and go-between, they had planned out their marital future
had in any way influenced their daughter’s acts, and counterclaimed for moral whereby Pacita would be the governess of their first-born; they started saving
damages. The issue before the court is WoN the divorce sought by Vicenta Escano money in a piggy bank.
is valid and binding upon courts of the Philippines? The SC said no. Vicenta 15. A few weeks before their secret marriage, their engagement was broken;
Escaño and Pastor Tenchavez’ marriage remain existent and undissolved under Vicenta returned the engagement ring and accepted another suitor, Joseling
the Philippine Law. Escaño’s divorce and second marriage cannot be deemed Lao.
valid under the Philippine Law to which Escaño was bound since at the time the 16. Her love for Pastor beckoned; she pleaded for his return, and they reconciled.
divorce decree was issued, Escaño, like her husband, was still a Filipino citizen. This time they planned to get married and then elope. To facilitate the
The acts of the wife in not complying with her wifely duties, deserting her husband elopement, Vicenta had brought some of her clothes to the room of Pacita
without any justifiable cause, leaving for the United States in order to secure a Noel in St. Mary's Hall, which was their usual trysting place.
decree of absolute divorce, and finally getting married again are acts which 17. Although planned for the midnight following their marriage, the elopement
constitute a willful infliction of injury upon the husband’s feelings in a manner did not, however, materialize because when Vicenta went back to her classes
contrary to morals, good customs or public policy, thus entitling Tenchavez to a after the marriage, her mother, who got wind of the intended nuptials, was
decree of legal separation under our law on the basis of adultery. already waiting for her at the college.
18. Vicenta was taken home where she admitted that she had already married
DOCTRINE: The Court rules: Pastor. Mamerto and Mena Escaño were surprised, because Pastor never
asked for the hand of Vicente, and were disgusted because of the great scandal
1. That a foreign divorce between Filipino citizens, sought and decreed after
that the clandestine marriage would provoke.
the effectivity of the present Civil Code (Rep. Act 386), is not entitled to
19. The following morning, the Escaño spouses sought priestly advice. Father
recognition as valid in this jurisdiction; and neither is the marriage
Reynes suggested a recelebration to validate what he believed to be an invalid
contracted with another party by the divorced consort, subsequently to
marriage, from the standpoint of the Church, due to the lack of authority from
the foreign decree of divorce, entitled to validity in the country;
the Archbishop or the parish priest for the officiating chaplain to celebrate
2. That the remarriage of divorced wife and her co-habitation with a person
 the marriage. decreed the annulment of the marriage, and asked for legal separation
20. The recelebration did not take place, because on 26 February 1948 Mamerto and one million pesos in damages.
Escaño was handed by a maid, whose name he claims he does not remember, 29. Vicenta claimed a valid divorce from plaintiff and an equally valid marriage
a letter purportedly coming from San Carlos college students and disclosing to her present husband, Russell Leo Moran; while her parents denied that they
an amorous relationship between Pastor Tenchavez and Pacita Noel; Vicenta had in any way influenced their daughter's acts, and counterclaimed for moral
translated the letter to her father, and thereafter would not agree to a new damages.
marriage. 30. The appealed judgment did not decree a legal separation, but freed Pastor
21. Vicenta and Pastor met that day in the house of Mrs. Pilar Mendezona. Tenchavez from supporting his wife and to acquire property to the exclusion
Thereafter, Vicenta continued living with her parents while Pastor returned of his wife, Vicenta.
to his job in Manila. Her letter of 22 March 1948, while still solicitous of her 31. It allowed the counterclaim of Mamerto Escaño and Mena Escaño for moral
husband's welfare, was not as endearing as her previous letters when their and exemplary damages and attorney's fees against the Pastor Tenchavez, to
love was aflame. the extent of P45,000.00, and Pastor resorted directly to this Court.
22. Vicenta was bred in Catholic ways but is of a changeable disposition, and 32. Pastor ascribes, as errors of the trial court, the following:
Pastor knew it. She fondly accepted her being called a "jellyfish." She was a. In not declaring legal separation; in not holding defendant Vicenta
not prevented by her parents from communicating with Pastor, but her letters F. Escaño liable for damages and in dismissing the complaint;
became less frequent as the days passed. b. In not holding the defendant parents Mamerto Escano and the heirs
23. As of June, 1948 the newlyweds were already estranged. Vicenta had gone to of Doña Mena Escaño liable for damages;
Jimenez, Misamis Occidental, to escape from the scandal that her marriage c. In holding the plaintiff liable for and requiring him to pay the
stirred in Cebu society. There, a lawyer filed for her a petition, drafted by damages to the defendant parents on their counterclaims; and
then Senator Emmanuel Pelaez, to annul her marriage. She did not sign the d. In dismissing the complaint and in denying the relief sought by the
petition. The case was dismissed without prejudice because of her non- plaintiff.
appearance at the hearing.
24. On 24 June 1950, without informing her husband, she applied for a passport, ISSUE/s
indicating in her application that she was single, that her purpose was to WoN the divorce sought by Vicenta Escaño is valid and binding upon courts of the
study, and she was domiciled in Cebu City, and that she intended to return Philippines. - NO, Vicenta Escaño and Pastor Tenchavez’ marriage remain existent
after two years. and undissolved under the Philippine Law.
25. The application was approved, and she left for the United States. On 22
August 1950, she filed a verified complaint for divorce against Pastor RULING: WHEREFORE, the decision under appeal is hereby modified as follows;
Tenchavez in the Second Judicial District Court of the State of Nevada in and
for the County of Washoe, on the ground of "extreme cruelty, entirely (1) Adjudging plaintiff-appellant Pastor Tenchavez entitled to a decree of legal
mental in character." On 21 October 1950, a decree of divorce, "final and separation from defendant Vicenta F. Escaño;
absolute", was issued in open court by the said tribunal.
26. In 1951 Mamerto and Mena Escaño filed a petition with the Archbishop of (2) Sentencing defendant-appellee Vicenta Escaño to pay plaintiff-appellant
Cebu to annul their daughter's marriage to Pastor. On 10 September 1954, Tenchavez the amount of P25,000 for damages and attorneys' fees;
Vicenta sought papal dispensation of her marriage.
27. On 13 September 1954, Vicenta married an American, Russell Leo Moran, (3) Sentencing appellant Pastor Tenchavez to pay the appellee, Mamerto Escaño
in Nevada. She now lives with him in California, and, by him, has begotten and the estate of his wife, the deceased Mena Escaño, P5,000 by way of damages and
children. She acquired American citizenship on 8 August 1958. attorneys' fees.
28. But on 30 July 1955, Tenchavez had initiated the proceedings at bar by a
Neither party to recover costs.
complaint in the Court of First Instance of Cebu, and amended on 31 May
1956, against Vicenta F. Escaño, her parents, Mamerto and Mena Escaño, RATIO:
whom he charged with having dissuaded and discouraged Vicenta from 25. As established by the factual antecedents, on 24 February 1948 Pastor
joining her husband, and alienating her affections, and against the Tenchavez and the defendant-appellee, Vicenta Escaño, were validly married
Roman Catholic Church, for having, through its Diocesan Tribunal, to each other, from the standpoint of our civil law, is clearly established by
 the record before us. Court of Washoe County, State of Nevada, on grounds of "extreme cruelty,
26. Both parties were then above the age of majority, and otherwise qualified; entirely mental in character." At the time the divorce decree was issued,
and both consented to the marriage, which was performed by a Catholic priest Vicenta Escaño, like her husband, was still a Filipino citizen. She was
(army chaplain Lavares) in the presence of competent witnesses. It is then subject to Philippine law, and Article 15 of the Civil Code of the
nowhere shown that said priest was not duly authorized under civil law to Philippines (Rep. Act No. 386), already in force at the time, expressly
solemnize marriages. provided:
27. The chaplain's alleged lack of ecclesiastical authorization from the parish a. Laws relating to family rights and duties or to the status,
priest and the Ordinary, as required by Canon law, is irrelevant in our civil condition and legal capacity of persons are binding upon the
law, not only because of the separation of Church and State but also because citizens of the Philippines, even though living abroad.
Act 3613 of the Philippine Legislature (which was the marriage law in force 34. The Civil Code of the Philippines, now in force, does not admit absolute
at the time) expressly provided that — divorce, quo ad vinculo matrimonii; and in fact does not even use that term,
a. SEC. 1. Essential requisites. Essential requisites for marriage are the to further emphasize its restrictive policy on the matter, in contrast to the
legal capacity of the contracting parties and consent. preceding legislation that admitted absolute divorce on grounds of adultery
28. The actual authority of the solemnizing officer was thus only a formal of the wife or concubinage of the husband. Instead of divorce, the present
requirement, and, therefore, not essential to give the marriage civil effects, Civil Code only provides for legal separation, and, even in that case, it
and this is emphasized by section 27 of said marriage act, which provided the expressly prescribes that "the marriage bonds shall not be severed”
following: 35. For the Philippine courts to recognize and give recognition or effect to a
a. SEC. 27. Failure to comply with formal requirements. No marriage foreign decree of absolute divorce betiveen Filipino citizens could be a patent
shall be declared invalid because of the absence of one or several of violation of the declared public policy of the state, specially in view of the
the formal requirements of this Act if, when it was performed, the third paragraph of Article 17 of the Civil Code that prescribes the following:
spouses or one of them believed in good faith that the person who a. Prohibitive laws concerning persons, their acts or property, and
solemnized the marriage was actually empowered to do so, and that those which have for their object public order, policy and good
the marriage was perfectly legal. customs, shall not be rendered ineffective by laws or judgments
29. The good faith of all the parties to the marriage (and hence the validity of promulgated, or by determinations or conventions agreed upon in a
their marriage) will be presumed until the contrary is positively proved. It is foreign country.
well to note here that in the case at bar, doubts as to the authority of the 36. Even more, the grant of effectivity in this jurisdiction to such foreign divorce
solemnizing priest arose only after the marriage, when Vicenta's parents decrees would, in effect, give rise to an irritating and scandalous
consulted Father Reynes and the archbishop of Cebu. discrimination in favor of wealthy citizens, to the detriment of those members
30. Moreover, the very act of Vicenta in abandoning her original action for of our polity whose means do not permit them to sojourn abroad and obtain
annulment and subsequently suing for divorce implies an admission that her absolute divorces outside the Philippines.
marriage to plaintiff was valid and binding. 37. From this point of view, it is irrelevant that appellant Pastor Tenchavez
31. Defendant Vicenta Escaño argues that when she contracted the marriage she should have appeared in the Nevada divorce court. Primarily because the
was under the undue influence of Pacita Noel, whom she charges to have been policy of our law cannot be nullified by acts of private parties; and
in conspiracy with appellant Tenchavez. additionally, because the mere appearance of a non-resident consort cannot
32. Even granting, for argument's sake, the truth of that contention, and assuming confer jurisdiction where the court originally had none.
that Vicenta's consent was vitiated by fraud and undue influence, such vices 38. From the preceding facts and considerations, there flows as a necessary
did not render her marriage ab initio void, but merely voidable, and the consequence that in this jurisdiction Vicenta Escaño's divorce and
marriage remained valid until annulled by a competent civil court. This was second marriage are not entitled to recognition as valid; for her previous
never done, and admittedly, Vicenta's suit for annulment in the Court of First union to plaintiff Tenchavez must be declared to be existent and
Instance of Misamis was dismissed for non-prosecution. undissolved.
33. It is equally clear from the record that the valid marriage between Pastor 39. It follows, likewise, that her refusal to perform her wifely duties, and her
Tenchavez and Vicenta Escaño remained subsisting and undissolved under denial of consortium and her desertion of her husband constitute in law a
Philippine law, notwithstanding the decree of absolute divorce that the wife wrong caused through her fault, for which the husband is entitled to the
sought and obtained on 21 October 1950 from the Second Judicial District corresponding indemnity.
40. Neither an unsubstantiated charge of deceit nor an anonymous letter charging are too strict or too liberal.
immorality against the husband constitute, contrary to her claim, adequate 46. Pastor Tenchavez’s first assignment of error is, therefore, sustained (with
excuse. Wherefore, her marriage and cohabitation with Russell Leo respect to: In not declaring legal separation; in not holding defendant Vicenta
Moran is technically "intercourse with a person not her husband" from F. Escaño liable for damages and in dismissing the complaint)
the standpoint of Philippine Law, and entitles plaintiff-appellant
Tenchavez to a decree of "legal separation under our law, on the basis of As to the claim for damages against Vicenta’s parents:
adultery"
41. The foregoing conclusions as to the untoward effect of a marriage after an 47. Pastor's charge that his wife's parents, Dr. Mamerto Escaño and his wife, the
invalid divorce are in accord with the previous doctrines and rulings of this late Doña Mena Escaño, alienated the affections of their daughter and
court on the subject, particularly those that were rendered under our laws influenced her conduct toward her husband are not supported by credible
prior to the approval of the absolute divorce act. evidence. The testimony of Pastor Tenchavez about the Escaño's animosity
42. As a matter of legal history, our statutes did not recognize divorces a toward him strikes us to be merely conjecture and exaggeration, and are
vinculo before 1917, when Act 2710 became effective; and the present Civil belied by Pastor's own letters written before this suit was begun. In these
Code of the Philippines, in disregarding absolute divorces, in effect merely letters he expressly apologized to the defendants for "misjudging them" and
reverted to the policies on the subject prevailing before Act 2710. for the "great unhappiness" caused by his "impulsive blunders" and "sinful
43. The rulings, therefore, under the Civil Code of 1889, prior to the Act above- pride," "effrontery and audacity". Plaintiff was admitted to the Escaño house
mentioned, are now, fully applicable. Of these, the decision in Ramirez vs. to visit and court Vicenta, and the record shows nothing to prove that he
Gmur, is of particular interest. Said this Court in that case: would not have been accepted to marry Vicente had he openly asked for her
a. As the divorce granted by the French Court must be ignored, it hand, as good manners and breeding demanded.
results that the marriage of Dr. Mory and Leona Castro, celebrated 48. There is no evidence that the parents of Vicenta, out of improper motives,
in London in 1905, could not legalize their relations; and the aided and abetted her original suit for annulment, or her subsequent divorce;
circumstance that they afterwards passed for husband and wife in she appears to have acted independently, and being of age, she was entitled
Switzerland until her death is wholly without legal significance. The to judge what was best for her and ask that her decisions be respected. Her
claims of the very children to participate in the estate of Samuel parents, in so doing, certainly cannot be charged with alienation of affections
Bishop must therefore be rejected. The right to inherit is limited to in the absence of malice or unworthy motives, which have not been shown,
legitimate, legitimated and acknowledged natural children. The good faith being always presumed until the contrary is proved.
children of adulterous relations are wholly excluded. The word 49. Plaintiff Tenchavez, in falsely charging Vicenta's aged parents with racial or
"descendants" as used in Article 941 of the Civil Code cannot be social discrimination and with having exerted efforts and pressured her to
interpreted to include illegitimates born of adulterous relations. seek annulment and divorce, unquestionably caused them unrest and anxiety,
44. Except for the fact that the successional rights of the children, begotten from entitling them to recover damages. While this suit may not have been
Vicenta's marriage to Leo Moran after the invalid divorce, are not involved impelled by actual malice, the charges were certainly reckless in the face of
in the case at bar, the Gmur case is authority for the proposition that such the proven facts and circumstances. Court actions are not established for
union is adulterous in this jurisdiction, and, therefore, justifies an action for parties to give vent to their prejudices or spleen.
legal separation on the part of the innocent consort of the first marriage, that 50. In the assessment of the moral damages recoverable by appellant Pastor
stands undissolved in Philippine law. In not so declaring, the trial court Tenchavez from defendant Vicente Escaño, it is proper to take into account,
committed error. against his patently unreasonable claim for a million pesos in damages, that
45. True it is that our ruling gives rise to anomalous situations where the status (a) the marriage was celebrated in secret, and its failure was not characterized
of a person (whether divorced or not) would depend on the territory where by publicity or undue humiliation on appellant's part; (b) that the parties never
the question arises. Anomalies of this kind are not new in the Philippines, and lived together; and (c) that there is evidence that appellant had originally
the answer to them was given in Barretto vs. Gonzales: agreed to the annulment of the marriage, although such a promise was legally
a. The hardship of the existing divorce laws in the Philippine Islands invalid, being against public policy (cf. Art. 88, Civ. Code). While appellant
are well known to the members of the Legislature. It is the duty of is unable to remarry under our law, this fact is a consequence of the
the Courts to enforce the laws of divorce as written by Legislature indissoluble character of the union that appellant entered into voluntarily and
if they are constitutional. Courts have no right to say that such laws with open eyes rather than of her divorce and her second marriage. All told,
 we are of the opinion that appellant should recover P25,000 only by way of
moral damages and attorney's fees.
51. With regard to the P45,000 damages awarded to the defendants, Dr. Mamerto
Escaño and Mena Escaño, by the court below, we opine that the same are
excessive. While the filing of this unfounded suit must have wounded said
defendants' feelings and caused them anxiety, the same could in no way have
seriously injured their reputation, or otherwise prejudiced them, lawsuits
having become a common occurrence in present society. What is important,
and has been correctly established in the decision of the court below, is that
said defendants were not guilty of any improper conduct in the whole
deplorable affair. This Court, therefore, reduces the damages awarded to
P5,000 only.
 008 VAN DORN vs. ROMILLO (Esguerra) and December 18, 1975, respectively.
G.R. No. L-68470 | October 8, 1985 | Melencio-Herrera, J. | Marriage, Adoption, 4. The two were divorced in Nevada in 1982, and Alice has re-married also in
and family relations Nevada, this time to Theodore Van Dorn.
5. On June 8, 1983, Upton filed suit against Alice in Civil Case No. 1075-P in Pasay
City RTC, stating that Alice’s business in Ermita, Manila, (the Galleon Shop), is
PETITIONER: ALICE REYES VAN DORN conjugal property of the parties, and asking that Alice be ordered to render an
RESPONDENTS: HON. MANUEL V. ROMILLO, JR., as Presiding Judge of Branch accounting of that business, and that Upton be declared with right to manage the
CX, Regional Trial Court of the National Capital Region Pasay City and RICHARD conjugal property.
UPTON 6. Alice moved to dismiss the case on the ground that the cause of action is barred
by previous judgment in the divorce proceedings before the Nevada Court
SUMMARY: Alice (Filipino citizen) and Upton (US citizen) got married in HK, lived wherein Upton had acknowledged that he and Alice had "no community property"
in the Philippines, and divorced in the US. Upton filed this case in Pasay RTC to assert as of June 11, 1982.
that he be declared with right to manage Alice’s business (Galleon Shop) as a conjugal
property, alleging that the divorce does not have an effect here in the Philippines as it is ALICE’s ARGUMENT:
contrary to public policy, thus Alice should still be considered as married. 1. Upton is estopped from laying claim on the alleged conjugal property because of
the representation he made in the divorce proceedings before the American Court
Is Alice still considered married by virtue of the nationality principle embodied in that they had no community of property; the Galleon Shop was not established
Art. 15 of the Civil Code, under which she is covered by the Philippine’s policy against through conjugal funds, and Upton’s claim is barred by prior judgment.
absolute divorces? NO.
UPTON’s ARGUMENT:
**See doctrine. In this case, the divorce in Nevada released Upton from the marriage 1. The Divorce Decree issued by the Nevada Court cannot prevail over the
from the standards of American law, under which divorce dissolves the marriage. prohibitive laws of the Philippines and its declared national policy; that the acts
Thus, pursuant to his national law, Upton is no longer the husband of Alice. He would and declaration of a foreign Court cannot, especially if the same is contrary to
have no standing to sue in the case below as Alice’s husband, entitled to exercise control public policy, divest Philippine Courts of jurisdiction to entertain matters within
over conjugal assets. As he is bound by the Decision of his own country's Court, which its jurisdiction.
validly exercised jurisdiction over him, and whose decision he does not repudiate, he is RTC’s RULING:
estopped by his own representation before said Court from asserting his right over the 1. RTC denied the Motion to Dismiss on the ground that the property involved is
alleged conjugal property. located in the Philippines so that the Divorce Decree has no bearing in the case.
To maintain that, under our laws, Alice has to be considered still married to Upton The denial is now the subject of this certiorari proceeding.
cannot be just. She should not be discriminated against in her own country if the ends of
justice are to be served. ISSUE:
Is Alice still considered married by virtue of the nationality principle embodied in Art.
15 of the Civil Code, under which she is covered by the Philippine’s policy against
DOCTRINE: While it is true that Philippine nationals are covered by the policy against absolute divorces? NO. It would be unjust to consider Alice still married.
absolute divorces, the same being considered contrary to our concept of public policy
and morality, aliens may obtain divorces abroad, which may be recognized in the RULING: WHEREFORE, the Petition is granted, and respondent Judge is hereby
Philippines, provided they are valid according to their national law. ordered to dismiss the Complaint filed in Civil Case No. 1075-P of his Court.

FACTS: RATIO:
1. Alice Van Dorn is a citizen of the Philippines. 10. The Nevada District Court, which decreed the divorce, had obtained jurisdiction
2. Richard Upton is a citizen of the United States. over Alice, who appeared in person before the Court during the trial of the case.
3. The two were married in Hongkong in 1972. After the marriage, they established It also obtained jurisdiction over Upton who authorized his attorneys in the
their residence in the Philippines. They begot two children born on April 4, 1973 divorce case, through a Special Power of Attorney, to agree to the divorce on the
 ground of incompatibility in the understanding that there were neither community
property nor community obligations.
11. There can be no question as to the validity of that Nevada divorce in any of the
States of the US. The decree is binding on Upton as an American citizen.
12. It is true that owing to the nationality principle embodied in Article 15 of the Civil
Code, 63 only Philippine nationals are covered by the policy against absolute
divorces the same being considered contrary to our concept of public policy and
morality. However, aliens may obtain divorces abroad, which may be
recognized in the Philippines, provided they are valid according to their
national law. In this case, the divorce in Nevada released Upton from the
marriage from the standards of American law, under which divorce dissolves the
marriage. As stated by the Federal Supreme Court of the United States in Atherton
vs. Atherton, 45 L. Ed. 794, 799:
The purpose and effect of a decree of divorce from the bond of matrimony
by a court of competent jurisdiction are to change the existing status or
domestic relation of husband and wife, and to free them both from the
bond. The marriage tie when thus severed as to one party ceases to bind
either. A husband without a wife, or a wife without a husband, is
unknown to the law. When the law provides, in the nature of a penalty,
that the guilty party shall not marry again, that party, as well as the
other, is still absolutely freed from the bond of the former marriage.
13. Thus, pursuant to his national law, Upton is no longer the husband of Alice.
He would have no standing to sue in the case below as Alice’s husband,
entitled to exercise control over conjugal assets. As he is bound by the Decision
of his own country's Court, which validly exercised jurisdiction over him, and
whose decision he does not repudiate, he is estopped by his own representation
before said Court from asserting his right over the alleged conjugal property.
14. To maintain that, under our laws, Alice has to be considered still married to
Upton and still subject to a wife's obligations under Article 109, et. seq. of the
Civil Code cannot be just. Alice should not be obliged to live together with,
observe respect and fidelity, and render support to Upton. The latter should not
continue to be one of her heirs with possible rights to conjugal property. She
should not be discriminated against in her own country if the ends of justice
are to be served.

63
Art. 15. Laws relating to family rights and duties or to the status, condition and legal capacity
of persons are binding upon citizens of the Philippines, even though living abroad.
 009 DE LEON v. CA (Fordan) social instiution as provided also by Art. 52 of the Civil Code. Thus, the court is of
June 6, 1990 | Medialdea, J. | Marriage and Family Relations the considered opinion and so holds that Macaria’s undertaking under Exhibit ‘E’
premised on the termination of marital relationship is not only contrary to law but
PETITIONER: Sylvia Lichauco De Leon contrary to Filipino morals and public policy. As such, any agreement or obligations
RESPONDENTS: The Hon. CA, Macaria De Leon, and Jose Vicente De Leon based on such unlawful consideration and which is contrary to public policy should
be deemed null and void.
SUMMARY: Jose and Sylvia were united in wedlock and had a child named Susana.
However, a de facto separation between the spouses occured with Sylvia leaving the DOCTRINE: A Letter-Agreement premised on the termination of marital
conjugal home and going to the US, where she obtained American citizenship. Sylvia relationship is not only contrary to law but contrary to Filipino morals and public
filed a divorced in California but later chose to hold it in abeyance and instead obtain policy. As such, any agreement or obligations based on such unlawful consideration
property settlement with Jose through a Letter-Agreement wherein Macaria, her and which is contrary to public policy should be deemed null and void.
mother-in-law signed on behalf of Jose. Then, Sylvia and Jose filed a joint petition
for judicial approval of dissolution of their conjugal partnership which the trial court FACTS:
affirmed. However, when Sylvia moved for the execution, Jose moved for 35. On Oct. 18, 1969, Jose Vicente De Leon (Jose) and Sylvia Lichauco De Leon
reconsideration of the order due to the verbal reformation of the joint petition made (Sylvia) were united in wedlock before the Municipal Mayor of Binangonan,
by Sylvia which is the payment of P4.5K monthly support. While the MOR was Rizal where a child named Susana L. De Leon (Susan) was born from this
pending, Macaria filed a motion for intervention alleging that she owned the union.
properties being claimed by Sylvia. The Pasig RTC ruled in favor of Macaria and 36. In Oct., 1972, a de facto separation between the spouses occured due to
ruled that the Letter-Agreement is null and void. On appeal, the CA affirmed the irreconcilable marital differences, with Sylvia leaving the conjugal home and
RTC’s decision. Hence, the current petition. Sylvia alleged that the cause or even going to the US, where she obtained American citizenship.
consideration of the Letter-Agreement is the termination of property relations only 37. On Nov. 23, 1973, Sylvia filed with the Superior Court of California, County
and not marital relations. of San Francisco, a petition for dissolution of marriage against Jose. In the said
divorce proceedings, Sylvia also filed claims for support and distribution of
The issue is whether or not the Letter-Agreement is valid. NO. The SC affirmed the properties. However, since Jose Vicente was then a Philippine resident and did
trial court’s ruling that in the Letter-Agreement, the parties not only agree to a not have any assets in the US, Sylvia chose to hold in abeyance the divorce
judicial separation of property of the spouses but likewise agreed to continue with proceedings, and in the meantime, concentrated her efforts to obtain some sort
the divorce proceedings which clearly contemplates that parties wanted not only of property settlements with Jose in the Philippines.
termination of property relationship but likewise of marital relationship in its 38. Thus, on Mar. 16, 1977, Sylvia succeeded in entering into a Letter-Agreement64
entirety. Furthermore, it would be safe to assume that the parties in not having with her mother-in-law, Macaria De Leon (Macaria). On same date, Macaria
specified the particular relationship which they wanted to peacefully and amicably paid cash payments to Sylvia of P100K and P280K (U$35K) in compliance
terminate had intended to terminate all kinds of relations, both marital and property. with her obligations as stipulated in the Letter-Agreeement.
The last sentence of para. 2 under “Obligations of the Wife” unequivocally states: “It 39. On Mar. 30, 1977, Sylvia and Jose filed before the CFI of Rizal a joint petition
is the stated objective of this agreement that said divorce proceedings (in the US) for judicial approval of dissolution of their conjugal partnership which the CFI
will continue.”There is merit in concluding that the consideration by which approved after an ex-parte hearings. Under the joint petition, the properties in
Intervenor executed Letter-Agreement (Exhibite ‘E’) was to secure freedom for her stated in the Letter-Agreement were adjudicated to Sylvia plus the Sedan (1972
son Jose, especially if Exhibit ‘R’—Intervenor, which is an agreement signed by model).
Sylvia to consent to and pardon Jose for adultery and concubinage (among others) 40. On Mar. 17, 1980, Sylvia moved for the execution of the above-mentioned
would be considered. Therefore, the trial court finds and holds that the cause or order. But Jose moved for a reconsideration of the order alleging that Sylvia
consideration for Macaria in having executed Exhibits ‘E’ was the termination of the made a verbal reformation of the petition as there was no such agreement for
marital relationship between her son Jose and Sylvia. The trial court cited Arts. 1306 the payment of P4,500 monthly support to commence from the alleged date of
and 1409 of the Civil Code claiming that marriage is not a mere contract but a sacred separation in April 1973 and that there was no notice given to him that Sylvia

64
Kindly see end of digest for full details.
 would attempt verbal reformation of the agreement contained in the joint ISSUE: Whether or not the Letter-Agreement is valid. – NO, since it is in
petition. contemplation of terminating marital relations which is contrary to to law, Filipino
41. While the said MOR was pending resolution, on Apr. 20, 1980, Macaria filed morals, and public policy.
with the trial court a motion for leave to intervene alleging that she is the owner
of the properties involved in the case, which was granted. RULING: The petition is hereby denied. The decision of the CA and its resolution are
42. On Oct. 29, 1980, Macaria, assisted by her husband Juan De Leon, filed her affirmed.
complaint in intervention. She assailed the validity and legality of the Letter-
Agreement which had for its purpose, according to her, the termination of RATIO:
marital relationship between Sylvia and Jose. However, the case was On the issue of termination of marital relations: (IMPORTANT)
transferred to the RTC of Pasig. 7. The 3rd par. of the Letter-Agreement reads: “In consideration for a peaceful and
43. The RTC of Pasig rendered judgment in favor of Macaria. It ruled: amicable termination of relations between the undersigned and her lawfully
a. that the Letter-Agreement is null and void wedded husband, Jose, your son, the following are agreed upon:” (italics
b. ordered Sylvia to return P380K plus legal interest, P100K as attorney’s fees, supplied)
and to pay the cost of the suit 8. It is readily apparent that the use of the word “relations” is ambiguous, perforce,
c. but it affirmed the dissolution of the conjugal partnership between Sylvia it is subject to interpretation. There being a doubt as to the meaning of this word
and Jose and further ordered that: taken by itself, a consideration of the general scope and purpose of the
i. each spouse shall own, dispose of, possess, administer and enjoy his or instrument in which it occurs and Art. 1374 of the Civil Code which provides
her separate estate, present and future without the consent of the other; that the various stipulations of a contract shall be interpreted together,
ii. all earnings from any profession, business or industry shall likewise attributing to the doubtful ones that sense which may result from all of them
belong to each of them separately; taken jointly, is necessary.
iii. the minor child, Susana, shall stay with Sylvia for 2-3 months every 9. Sylvia insists that the consideration for her execution of the Letter-
year—the transportation both ways of the child for the trip to the Agreement was the termination of property relations with her husband.
Philippines to be at the expense of Jose; and Indeed, Sylvia and Jose subsequently filed a joint petition for judicial
iv. Jose shall give Sylvia P4,500 as monthly support for Susana to approval of the dissolution of their conjugal partnership, sanctioned by
commence from Feb. 19, 1980. Art. 19165 of the Civil Code. On the other hand, Macaria and Jose assert
44. Sylvia appealed to the CA but the latter affirmed the decision of the RTC. that the consideration was the termination of marital relationship.
45. Hence, the current petition. Sylvia claimed that the trial court erred: 10. SC: sustained the observations and conclusions made by the trial court.
a. in finding that the cause or consideration of the Letter-Agreement is the The following are the findings of the trial court:
termination of marital relations; Ø On page 2 of the letter agreement (Exhibit ‘E’), the parties not only agree to a
b. or failed to appreciate testimonial and documentary evidence proving that judicial separation of property of the spouses but likewise to continue with
Macaria’s claims of threat, intimidation and mistake are baseless; and divorce proceedings which clearly means that the parties wanted not only
c. in finding that she committed breach of the Letter-Agreement; and the termination of property relationship but likewise of marital relationship
in its entirety. Furthermore, it would be safe to assume that the parties in Exhibit
d. or failed to appreciate evidence proving Macaria’s material breach thereof.
‘E’ not having specified the particular relationship which they wanted to
peacefully and amicably terminate had intended to terminate all kinds of relations,
both marital and property. While there could be inherent benefits to a termination

65
Art. 191. The husband or the wife may ask for the separation of property, and it shall be decreed The husband and the wife may agree upon the dissolution of the conjugal partnership during
when the spouse of the petitioner has been sentenced to a penalty which carries with it civil the marriage, subject to judicial approval. All the creditors of the husband and of the wife, as well
interdiction, or has been declared absent, or when legal separation has been granted. as of the conjugal partnership shall be notified of any petition for judicial approval or the voluntary
In case of abuse of powers of administration of the conjugal partnership property by the dissolution of the conjugal partnership, so that any such creditors may appear at the hearing to
husband, or in case of abandonment by the husband, separation of property may also be ordered safeguard his interests. Upon approval of the petition for dissolution of the conjugal partnership,
by the court, according to the provisions of articles 167 and 178, No. 3. the court shall take such measures as may protect the creditors and other third persons.
In all these cases, it is sufficient to present the final judgment which has been entered against After dissolution of the conjugal partnership, the provisions of articles 214 and 215 shall
the guilty or absent spouse. (1433a) apply. The provisions of this Code concerning the effect of partition stated in articles 498 to 501
shall be applicable. (1433a)
 of conjugal property relationship between the spouses, the court could not clearly 13. Granting, in gratia argumenti, that the consideration of the Letter-Agreement
perceive the underlying benefit for the intervenor insofar as termination of was the termination of property relations, we agree with the CA that: the
property relationship between petitioners is concerned, unless the underlying agreement nevertheless is void because it contravenes the following provisions
consideration for intervenor is the termination of marital relationship by divorce of Art. 221 of the Civil Code which states that: The following shall be void and
proceedings between her son Jose and his wife Sylvia. The last sentence of para.
of no effect: (1) Any contract for personal separation between husband and
2 under “Obligations of the Wife” unequivocally states: “It is the stated objective
of this agreement that said divorce proceedings (in the US) will continue.”There wife; and (2) Every extra-judicial agreement, during marriage, for the
is merit in concluding that the consideration by which Intervenor executed Exhibit dissolution of the conjugal partnership of gains or of the absolute community
‘E’ was to secure freedom for her son Jose, especially if Exhibit ‘R’—Intervenor, of property between husband and wife;”
which is (sic) agreement signed by Sylvia to consent to and pardon Jose for 14. Besides, the Letter-Agreement shows on its face that it was prepared by Sylvia,
adultery and concubinage (among others) would be considered. In the light, and in this regard, the ambiguity in a contract is to be taken contra proferentem,
therefore, of the foregoing circumstances, this Court finds credible the testimony i.e., construed against the party who caused the ambiguity and could have also
of intervenor.66 Therefore, it finds and holds that the cause or consideration avoided it by the exercise of a little more care. Thus, Art. 1377 of the Civil
for Macaria in having executed Exhibits ‘E’ to ‘E-2’ was the termination of Code provides: “The interpretation of obscure words of stipulations in a
the marital relationship between her son Jose and Sylvia.
Ø The trial court cited Arts. 130667 and 140968 of the Civil Code claiming that
contract shall not favor the party who caused the obscurity”.
marriage is not a mere contract but a sacred social instiution as provided
also by Art. 52 69 of the Civil Code. Thus, the court is of the considered On the issue of intimidation and mistake:
opinion and so holds that Macaria’s undertaking under Exhibit ‘E’ premised 15. Sylvia alleges that since the nullity of the Letter- Agreement proceeds from the
on the termination of marital relationship is not only contrary to law but unlawful consideration solely of Macaria, applying the pari delicto rule, it is
contrary to Filipino morals and public policy. As such, any agreement or clear that she cannot recover what she has given by reason of the Letter-
obligations based on such unlawful consideration and which is contrary to Agreement nor ask for the fulfillment of what has been promised her.
public policy should be deemed null and void.” 16. On her part, Macaria raises the defenses of intimidation and mistake which led
11. Additionally, Art. 191 of the Civil Code contemplates properties belonging to her to execute the Letter-Agreement.
the spouses and not those belonging to a third party, who, in the case at bar, is 17. In resolving this issue, the trial court said:
Macaria. In the petition for the dissolution of the conjugal partnership, it was a. In her 2nd cause of action, Macaria claims that her signing of Exhibits ‘E’ to ‘E-2’
made to appear that the said properties are conjugal in nature. was due to a fear of an unpeaceful and troublesome separation of her son with Sylvia
12. However, Macaria was able to prove that the questioned properties are owned as shown in her testimony.70 On the other hand, Sylvia claims that it was Macaria
by her. Neither Sylvia nor Jose Vicente adduced any contrary evidence. and Jose who initiated the move to convince her to agree to a dissolution of their
conjugal partnership due to the alleged extra-marital activities of Jose.71

66
“Q: Will you please go over the Exhibit ‘E’ to ‘E-2’—intervenor consisting of three pages and ‘These contracts cannot be ratified. Neither can the right to set up the defense of illegality be
inform us whether or not this is the letter of March 16, 1977 which you just referred to? waived.’
69
“A: Yes, this is the letter. Art. 52. Marriage is not a mere contract but an inviolable social institution. Its nature,
“Q: Why did you affix your signature to this Exh. ‘E’—intervenor (sic)? consequences and incidents are governed by law and not subject to stipulations . . .’
70
“A: Because at that time when I signed it I want to buy peace for myself and for the whole family. Q: Will you please inform us how did Sylvia Lichauco disturb or threaten your son or yourself?
“Q: From whom did you want to buy peace and/or what kind of peace? A: Despite the fact that Sylvia Lichauco voluntarily left my son Joe Vincent and abandoned him,
“A: I wanted to buy peace from Sylvia Lichauco whom I knew was kind of ‘matapang;’ so I want she unashamedly nagged Joe and me to get money and when her demands were not met she
peace for me and primarily for the peaceful and amicable termination of maritalrelationship resorted to threats like, she threatened to bring Joe to court for support. Sylvia threatened to
between my son, Joe Vincent and Sylvia.” (Deposition of Macaria) scandalize our family by these baseless suits; in fact she caused the service of summons to Joe
67
Art. 1306. The contracting parties may establish such stipulations, clauses, terms, and when he went to the United States. (Macaria’s Deposition)
71
conditions as they may deem convenient, provided they are not contrary to law, morals, good Q: Now in her testimony, Macaria Madrigal de Leon also said that you threatened her by
customs, public order or public policy. If the stipulation is contrary to law, morals or public policy, demanding money and nagged her until she agreed to the letter agreement of March 1977, what
the contract is void and inexistent from the beginning. can you say about that?
68
Art. 1409. The following contracts are inexistent and void from the beginning: A: I think with all the people sitting around with Atty. Quisumbing, Atty. Chuidian, my father-in-
(1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order law, my sister-in-law and I, you know, it can be shown that this was a friendly amicable settlement
or public policy; that they were much really interested in settling down as I was. I think there were certain reasons
xxx that they wanted to get done or planned, being at that time Jose was already remarried and had
(7) Those expressly prohibited or declared void by law. a child. That since she then found out that since she was worried about what might be, you know,
 Ø In resolving this issue, this Court leans heavily on Exhibit ‘R’— intervenor, c. that the threat be real and serious, there being an evident disproportion
which was not controverted by Sylvia. There appears some truth to the between the evil and the resistance which all men can offer, leading to the
apprehensions of Macaria for in Sylvia’s testimony she confirms the worry of choice of the contract as the lesser evil; and
Macaria as follows:” . . . being at that time Jose was already remarried and had d. that it produces a reasonable and well-grounded fear from the fact that the
a child. That since she (intervenor) found out that, she was worried about what
person from whom it comes has the necessary means or ability to inflict the
might be, you know, involved in any future matters. She just want me out of the
picture.” The aforesaid fear of Macaria was further corroborated by her witness threatened injury.
Concepcion Tagudin.72 19. Applying the foregoing, the claim of Macaria that Sylvia threatened her to
b. In her 3rd cause of action, Macaria claims mistake or error in having signed bring Jose to court for support, to scandalize their family by baseless suits
Exhibits 1 to E-2 as alleged in her testimony.73 On the other hand, Sylvia claims and that Sylvia would pardon Jose for possible crimes of adultery and/or
that Macaria could not have been mistaken in her having signed the document concubinage subject to the transfer of certain properties to her, is obviously
as she was under advice of counsel during the time that Exhibits ‘E’ to ‘E-2’ not the intimidation referred to by law.
was negotiated. To support such claims, the deposition testimony of Atty. 20. With respect to mistake as a vice of consent, neither is Macaria’s alleged
Vicente Chuidian was presented.74 mistake in having signed the Letter-Agreement because of her belief that
Ø As provided by Arts. 1330 and 1331 of the Civil Code, the preponderance
of evidence leans in favor of Macaria who even utilized the statement of the
Sylvia will thereby eliminate inheritance rights from her and Jose, the mistake
divorce lawyer of Sylvia (Mr. Penrod) in support of the fact that she was referred to in Art. 1331 of the Civil Code. It does not appear that the condition
mistaken in having signed Exhibits ‘E’ to ‘E-2’ because when she signed that Sylvia “will eliminate her inheritance rights” principally moved Macaria
said Exhibits she believed the fact that Sylvia would eliminate her to enter into the contract. Rather, such condition was but an incident of the
inheritance rights and there is no showing that she was properly advised by consideration thereof which, as discussed earlier, is the termination of marital
any American lawyer on the fact whether Sylvia, being an American citizen, relations.
could rightfully do the same.
Ø However, the issue of whether there was mistake of fact on the part of On the issue of pari delicto:
Macaria or not, this Court could not see a valid cause or consideration in 21. Therefore, both parties acted in violation of the laws. However, the pari delicto
favor of Macaria De Leon having signed Exhibits ‘E’ to ‘E-2.’ For even if
rule, expressed in the maxims “Ex dolo malo non oritur actio” and “In pari
Sylvia had confirmed Mr. Penrod’s statement during the divorce
proceedings in the US that she would undertake to eliminate her hereditary delicto potior est conditio defendentis,” which refuses remedy to either party to
rights in the event of the property settlement, under Philippine laws, such an illegal agreement and leaves them where they are, does not apply in this
contract would likewise be voidable, for under Art. 1347 of the Civil Code case.
‘no contract may be entered into upon future inheritance’. 22. Art. 1414 of the Civil Code, which is an exception to the pari delicto rule, is
18. The SC, however, do not subscribe to the above-stated view of the trial court. the proper law to be applied. It provides: “When money is paid or property
In order that intimidation may vitiate consent and render the contract invalid, delivered for an illegal purpose, the contract may be repudiated by one of the
as provided by Art. 1335 of the Civil Code, the following requisites must parties before the purpose has been accomplished, or before any damage has
concur: been caused to a third person. In such case, the courts may, if the public interest
a. that the intimidation must be the determining cause of the contract, or must will thus be subserved, allow the party repudiating the contract to recover the
have caused the consent to be given; money or property.”
b. that the threatened act be unjust or unlawful; 23. Since the Letter-Agreement was repudiated before the purpose has been
accomplished and to adhere to the pari delicto rule in this case is to put a

73
involved in any future matters. She just wanted to do what she could. She just want me out of Q: Before you were told such by your lawyers what if any were your basis to believe that Sylvia
the picture. So in no way, it cannot be said that I nagged and threatened her. (TSN) would no longer have inheritance rights from your son, Joe Vincent?
72
Q: Now, you mentioned that you were present when Mrs. Macaria De Leon signed this Exhibit A: Well, that was what Sylvia told me. That she will eliminate any inheritance rights from me or
‘E-2,’ will you inform us whether there was anything unusual which you noticed when Mrs. my son Joe Vincent’s properties if I sign the document amicably. (Macaria’s Deposition)
74
Macaria M. De Leon signed this Exhibit ‘E-2’? Atty. Herbosa: Now you mentioned Atty. Norberto Quisum- bing, would you be able to tell us
A: Mrs. Macaria M. De Leon was in a state of tension and anger. She was so mad that she in what capacity he was present in that negotiation?
remarked: ‘Puñetang Sylvia ito bakit ba niya ako ginugulo. Ipakukulong daw niya si Joe Vincent Atty. Chuidian: He was counsel for Doña Macaria and for Joe Vincent, the spouse of Sylvia.
kung hindi ko pipirmahan ito. Sana matapos na itong problemang ito pagkapirmang ito,’ sabi (Deposition of V. Chuidian)
niya. (Concepcion’s Deposition)
 premium to the circumvention of the laws, positive relief should be granted to 4. This contract is intended to be applicable both in the Republic of the Philippines and in the
Macaria. Justice would be served by allowing her to be placed in the position United States of America. It is agreed that this will constitute an actionable document in
in which she was before the transaction was entered into. both jurisdictions and the parties herein waive their right to object to the use of this
24. With the conclusions thus reached, we find it unnecessary to discuss the other document in the event a legal issue should arise relating to the validity of this document. In
the event of a dispute, this letter is subject to interpretation under the laws of California,
issues raised.
U.S.A.
5. To allow her daughter to spend two to three months each year with the father upon mutual
CONTENTS OF LETTER-AGREEMENT: convenience.

This letter represents a contractual undertaking among (A) the undersigned (B) your son, Mr.
Jose Vicente de Leon, represented by you, and (C) yourself in your personal capacity. You
hereby bind yourself jointly and severally to answer for the undertakings of Joe Vincent under
this contract. In consideration for a peaceful and amicable termination of relations between the
undersigned and her lawfully wedded husband, Jose Vicente de Leon, your son, the following
are agreed upon:

Obligations of Jose Vicente de Leon and/or yourself in a joint and several capacity:
1. To deliver with clear title free from all liens and encumbrances and subject to no claims in
any form whatsoever the following properties to Sylvia Lichauco-de Leon hereinafter
referred to as the wife:
a. Suite 11-C, Avalon Condominium, Ortigas Ave., corner Xavier St., Mandaluyong,
Rizal, Philippines.
b. Apartment 702, Wack Wack Condominium, Mandaluyong, Rizal, Philippines.
c. The rights to assignment of 2 Ayala lots in Alabang, Rizal (Corner lots, 801 sq. meters
each). (Fully paid)
d. 2470 Wexford Ave., South San Francisco, California, U.S.A. (Lot 18 Block 22
Westborough Unit No. 2). (Fully paid)
e. The sum of P100,000
f. (1) $30,000 and (2) $5,000
2. To give monthly support payable six (6) months in advance every year to any designated
assignee of the wife for the care and upbringing of Susana Lichauco de Leon which is hereby
pegged at the exchange rate of 7.50 to the dollar subject to adjustments in the event of
monetary exchange fluctuations. Subsequent increase on actual need upon negotiation.
3. To respect the custody of said minor daughter as pertaining exclusively to the wife except
as herein provided.

Obligations of the wife:

1. To agree to a judicial separation of property in accordance with Philippine law and in this
connection to do all that may be necessary to secure said separation of property including
her approval in writing of a joint petition or consent decree.
2. To amend her complaint in the United States before the Federal Court of California, U.S.A.
entitled “Sylvia Lichauco de Leon vs. Jose V. de Leon” in a manner compatible with the
objectives of this herein agreement. It is the stated objective of this agreement that said
divorce proceedings will continue.
3. All the properties herein described for assignment to the wife must be assigned to Sylvia
Lichauco de Leon upon the decree of the Court of First Instance in the Joint Petition for
Separation of Property; except for the P100,000, $30,000 and $5,000 which will be paid
immediately.
 011 YAO KEE, et al. vs. SY-GONZALES (Eleazar edited by Gonzales) Sy filed a petition for the grant of letters of administration in then Court of
November 24, 1988 | Cortes, J. | Exceptions to application of foreign law First Instance of Rizal Branch XXXIII, Caloocan City.
35. In said petition they alleged among others that:
PETITIONERS: YAO KEE, SZE SOOK WAH, SZE LAI CHO, and SY CHUN a. (a) they are the children of the deceased with Asuncion Gillego;
YEN b. (b) to their knowledge Sy Mat died intestate;
RESPONDENTS: AIDA SY-GONZALES, MANUEL SY, TERESITA SY- c. (c) they do not recognize Sy Kiat's marriage to Yao Kee nor the
BERNABE, RODOLFO SY, and HONORABLE COURT OF APPEALS filiation of her children to him; and,
d. (d) they nominate Aida Sy-Gonzales for appointment as
SUMMARY: Sy Kiat, a Chinese national died in Caloocan City, leaving behind administratrix of the intestate estate of the deceased.
his real and personal properties in the Philippines worth P 300,000 more or less. 36. This petition was opposed by Yao Kee, Sze Sook Wah, Sze Lai Cho and Sy
Aida Sy-Gonzales, et. al. filed a petition for the grant of letters of administration Yun Chen who alleged that:
claiming among other things that they are children of the deceased with Asuncion a. (a) Yao Kee is the lawful wife of Sy Kiat whom he married on
Gillego, a Filipina. The petition was opposed by Yao kee who alleged that she is January 19, 1931 in China;
the lawful wife of the deceased whom he married in China and that one of her b. (b) the other oppositors are the legitimate children of the deceased
children, Sze Sook Wah, should be the administrator of the deceased. The CFI with Yao Kee; and,
decided in favor of Yao Kee’s petition but was modified and set aside by the Court c. (c) Sze Sook Wah is the eldest among them and is competent,
of Appeals by declaring all parties as natural children of Sy Kiat thus having equal willing and desirous to become the administratrix of the estate of Sy
rights. The issue before the SC is WoN the CA erred in declaring that the marriage Kiat
between Sy Kiat and Yao Kee have not been proven in accordance with Chinese 37. After hearing, the probate court, finding among others that:
laws and customs – NO, CA did not err, Yao Kee et al. did not present any a. (1) Sy Kiat was legally married to Yao Kee
competent evidence relative to the law and custom of China on marriage. The b. (2) Sze Sook Wah, Sze Lai Cho and Sze Chun Yen are the legitimate
testimonies of Yao and Gan Ching cannot be considered as proof of China's law children of Yao Kee with Sy Mat; and
or custom on marriage not only because they arecself-serving evidence, but more c. (3) Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo
importantly, there is no showing that they are competent to testify on the subject Sy are the acknowledged illegitimate offsprings of Sy Kiat with
matter. The law requires that "a custom must be proved as a fact, according to the Asuncion Gillego
rules of evidence" On this score the Court had occasion to state that "a local 38. Held if favor of the oppositors, Yao Kee et al. and appointed Sze Sook Wah
custom as a source of right can not be considered by a court of justice unless such as the administratrix of the intestate estate of the deceased
custom is properly established by competent evidence like any other fact" The 39. On appeal the Court of Appeals rendered a decision modifying that of the
same evidence, if not one of a higher degree, should be required of a foreign probate court, the dispositive portion of which reads:
custom. Accordingly, in the absence of proof of the Chinese law on marriage, it 40. IN VIEW OF THE FOREGOING, the decision of the lower Court is hereby
should be presumed that it is the same as ours. Since Yao Kee admitted in her MODIFIED and SET ASIDE and a new judgment rendered as follows:
testimony that there was no solemnizing officer as is known here in the when her a. (1) Declaring petitioners Aida Sy-Gonzales, Manuel Sy, Teresita
alleged marriage to Sy Mat was celebrated, it therefore follows that her marriage Sy- Bernabe and Rodolfo Sy acknowledged natural children of the
to Sy Kiat, even if true, cannot be recognized in this jurisdiction. deceased Sy Kiat with Asuncion Gillego, an unmarried woman with
whom he lived as husband and wife without benefit of marriage for
DOCTRINE: Court has held that to establish a valid foreign marriage two things many years:
must be proven, namely: (1) the existence of the foreign law as a question of fact; b. (2) Declaring oppositors Sze Sook Wah, Sze Lai Chu and Sze Chun
and (2) the alleged foreign marriage by convincing evidence. Yen, the acknowledged natural children of the deceased Sy Kiat
with his Chinese wife Yao Kee, also known as Yui Yip, since the
FACTS: legality of the alleged marriage of Sy Mat to Yao Kee in China had
33. Sy Kiat, a Chinese national, died on January 17, 1977 in Caloocan City where not been proven to be valid to the laws of the Chinese People's
he was then residing, leaving behind real and personal properties here in the Republic of China;
Philippines worth P300,000.00 more or less. c. (3) Declaring the deed of sale executed by Sy Kiat on December 7,
34. Thereafter, Aida Sy-Gonzales, Manuel Sy, Teresita Sy-Bernabe and Rodolfo 1976 in favor of Tomas Sy of the Avenue Tractor and Diesel Parts
 Supply to be valid and accordingly, said property should be accordance with Chinese law and custom was conclusively proven. To
excluded from the estate of the deceased Sy Kiat; and buttress this argument they rely on the following testimonial and
d. (4) Affirming the appointment by the lower court of Sze Sook Wah documentary evidence.
as judicial administratrix of the estate of the deceased. 53. First, the testimony of Yao Kee summarized by the trial court as follows:
41. From said decision both parties moved for partial reconsideration, which was a. Yao Kee testified that she was married to Sy Kiat on January 19,
however denied by respondent court. They thus interposed their respective 1931 in Fookien, China; that she does not have a marriage certificate
appeals to this Court. because the practice during that time was for elders to agree upon
42. Private respondents, Sy-Gonzales et al., filed a petition with this Court the betrothal of their children, and in her case, her elder brother was
docketed as G.R. No. 56045 entitled "Aida Sy-Gonzales, Manuel Sy, Teresita the one who contracted or entered into [an] agreement with the
Sy-Bernabe and Rodolfo Sy v. Court of Appeals, Yao Kee, Sze Sook Wah, parents of her husband; that the agreement was that she and Sy Mat
Sze Lai Cho and Sy Chun Yen" questioning paragraphs (3) and (4) of the would be married, the wedding date was set, and invitations were
dispositive portion of the Court of Appeals' decision. The Supreme Court sent out; that the said agreement was complied with; that she has
however resolved to deny the petition and the motion for reconsideration. five children with Sy Kiat, but two of them died; that those who are
Thus on March 8, 1982 entry of judgment was made in G.R. No. 56045. alive are Sze Sook Wah, Sze Lai Cho, and Sze Chun Yen, the eldest
43. The instant petition, on the other hand, questions paragraphs (1) and (2) of being Sze Sook Wah who is already 38 years old; that Sze Sook Wah
the dispositive portion of the decision of the Court of Appeals. This petition was born on November 7, 1939; that she and her husband, Sy Mat,
was initially denied by the Supreme Court on June 22, 1981. Upon motion of have been living in FooKien, China before he went to the
the petitioners the Court in a resolution dated September 16, 1981 Philippines on several occasions; that the practice during the time of
reconsidered the denial and decided to give due course to this petition. her marriage was a written document [is exchanged] just between
the parents of the bride and the parents of the groom, or any elder
ISSUE/s: for that matter; that in China, the custom is that there is a go-
1. WoN the CA erred in declaring that the marriage between Sy Kiat and Yao between, a sort of marriage broker who is known to both parties who
Kee has not been proven valid in accordance with the laws of China – NO would talk to the parents of the bride-to-be; that if the parents of the
the CA did not err, Yao Kee et al. did not present any competent evidence bride-to-be agree to have the groom-to-be their son in-law, then they
relative to the law and custom of China on marriage. The testimonies of Yao agree on a date as an engagement day; that on engagement day, the
and Gan Ching cannot be considered as proof of China's law or custom on parents of the groom would bring some pieces of jewelry to the
marriage not only because they are parents of the bride-to-be, and then one month after that, a date
self-serving evidence, but more importantly, there is no showing that they are would be set for the wedding, which in her case, the wedding date
competent to testify on the subject matter. to Sy Kiat was set on January 19, 1931; that during the wedding the
2. WoN CA erred in declaring Sy-Gonzles et al. as natural children of Sy Kiat bridegroom brings with him a couch (sic) where the bride would ride
with Asuncion Gillego – No, private respondents, Sy-Gonzales are also the and on that same day, the parents of the bride would give the dowry
deceased's acknowledged natural children with Asuncion Gillego, a Filipina for her daughter and then the document would be signed by the
with whom he lived for twenty-five (25) years without the benefit of parties but there is no solemnizing officer as is known in the
marriage. They have in their favor their father's acknowledgment, evidenced Philippines; that during the wedding day, the document is signed
by a compromise agreement entered into by and between their parents and only by the parents of the bridegroom as well as by the parents of
approved by the Court of First Instance on February 12, 1974 wherein Sy the bride; that the parties themselves do not sign the document; that
Kiat not only acknowleged them as his children by Asuncion Gillego but the bride would then be placed in a carriage where she would be
likewise made provisions for their support and future inheritance brought to the town of the bridegroom and before departure the bride
would be covered with a sort of a veil; that upon reaching the town
RULING: WHEREFORE, the decision of the Court of Appeals is hereby of the bridegroom, the bridegroom takes away the veil; that during
AFFIRMED. her wedding to Sy Kiat (according to said Chinese custom), there
were many persons present; that after Sy Kiat opened the door of the
RATIO: carriage, two old ladies helped her go down the carriage and brought
52. Petitioners, Yao Kee et al. argue that the marriage of Sy Kiat to Yao Kee in her inside the house of Sy Mat; that during her wedding, Sy Chick,
 the eldest brother of Sy Kiat, signed the document with her mother; custom as a source of right can not be considered by a court of justice unless
that as to the whereabouts of that document, she and Sy Mat were such custom is properly established by competent evidence like any other
married for 46 years already and the document was left in China fact" The same evidence, if not one of a higher degree, should be required of
and she doubt if that document can still be found now; that it was a foreign custom.
left in the possession of Sy Kiat's family; that right now, she does 62. The law on foreign marriages is provided by Article 71 of the Civil Code
not know the whereabouts of that document because of the lapse of which states that:
many years and because they left it in a certain place and it was a. Art. 71. All marriages performed outside the Philippines in
already eaten by the termites; that after her wedding with Sy Kiat, accordance with the laws in force in the country where they were
they lived immediately together as husband and wife, and from then performed and valid there as such, shall also be valid in this
on, they lived together; that Sy Kiat went to the Philippines country, except bigamous, Polygamous, or incestuous marriages, as
sometime in March or April in the same year they were married; that determined by Philippine law.
she went to the Philippines in 1970, and then came back to China; 63. Construing this provision of law the Court has held that to establish a
that again she went back to the Philippines and lived with Sy Mat as valid foreign marriage two things must be proven, namely: (1) the
husband and wife; that she begot her children with Sy Kiat during existence of the foreign law as a question of fact; and (2) the alleged
the several trips by Sy Kiat made back to China. foreign marriage by convincing evidence
54. Second, the testimony of Gan Ching, a younger brother of Yao Kee who 64. In proving a foreign law the procedure is provided in the Rules of Court. With
stated that he was among the many people who attended the wedding of his respect to an unwritten foreign law, Rule 130 section 45 states that:
sister with Sy Kiat and that no marriage certificate is issued by the Chinese a. SEC. 45. Unwritten law.—The oral testimony of witnesses, skilled
government, a document signed by the parents or elders of the parties being therein, is admissible as evidence of the unwritten law of a foreign
sufficient country, as are also printed and published books of reports of
55. Third, the statements made by Asuncion Gillego when she testified before decisions of the courts of the foreign country, if proved to be
the trial court to the effect that (a) Sy Mat was married to Yao Kee according commonly admitted in such courts.
to Chinese custom; and, (b) Sy Kiat's admission to her that he has a Chinese 65. Proof of a written foreign law, on the other hand, is provided for under Rule
wife whom he married according to Chinese custom 132 section 25, thus:
56. Fourth, Sy Kiat's Master Card of Registered Alien issued in Caloocan City a. SEC. 25. Proof of public or official record.—An official record or
on October 3, 1972 where the following entries are found: "Marital status— an entry therein, when admissible for any purpose, may be
Married"; "If married give name of spouses—Yao Kee"; "Address-China; evidenced by an official publication thereof or by a copy attested by
"Date of marriage—1931"; and "Place of marriage—China" the officer having the legal custody of the record, or by his deputy,
57. Fifth, Sy Kiat's Alien Certificate of Registration issued in Manila on January and accompanied, if the record is not kept in the Philippines, with a
12, 1968 where the following entries are likewise found: "Civil status— certificate that such officer has the custody. If the office in which
Married"; and, 'If married, state name and address of spouse—Yao Kee the record is kept is in a foreign country, the certificate may be made
Chingkang, China" by a secretary of embassy or legation, consul general, consul, vice
58. And lastly, the certification issued in Manila on October 28, 1977 by the consul, or consular agent or by any officer in the foreign service of
Embassy of the People's Republic of China to the effect that "according to the Philippines stationed in the foreign country in which the record
the information available at the Embassy Mr. Sy Kiat a Chinese national and is kept and authenticated by the seal of his office.
Mrs. Yao Kee alias Yui Yip also Chinese were married on January 19, 1931 66. The Court has interpreted section 25 to include competent evidence like the
in Fukien, the People's Republic of China” testimony of a witness to prove the existence of a written foreign law
59. These evidence may very well prove the fact of marriage between Yao Kee 67. In the case at bar Yao Kee et al. did not present any competent evidence
and Sy Kiat. However, the same do not suffice to establish the validity of said relative to the law and custom of China on marriage. The testimonies of Yao
marriage in accordance with Chinese law or custom. and Gan Ching cannot be considered as proof of China's law or custom on
60. Custom is defined as "a rule of conduct formed by repetition of acts, marriage not only because they are
uniformly observed (practiced) as a social rule, legally binding and obligatory self-serving evidence, but more importantly, there is no showing that they are
61. The law requires that "a custom must be proved as a fact, according to the competent to testify on the subject matter. For failure to prove the foreign law
rules of evidence" On this score the Court had occasion to state that "a local or custom, and consequently, the validity of the marriage in accordance with
 said law or custom, the marriage between Yao Kee and Sy Kiat cannot be b. the testimony of their mother Yao Kee who stated that she had five
recognized in this jurisdiction. children with Sy Kiat, only three of whom are alive namely, Sze
68. Petitioners contend that contrary to the Court of Appeals' ruling they are not Sook Wah Sze Lai Chu and Sze Chin Yan
duty bound to prove the Chinese law on marriage as judicial notice thereof c. an affidavit executed on March 22, 1961 by Sy Kiat for presentation
had been taken by this Court in the case of Sy Joc Lieng v. Sy Quia to the Local Civil Registrar of Manila to support Sze Sook Wah's
69. This contention is erroneous. Well-established in this jurisdiction is the application for a marriage license, wherein Sy Kiat expressly stated
principle that Philippine courts cannot take judicial notice of foreign laws. that she is his daughter
They must be alleged and proved as any other fact 8. Likewise on the record is the testimony of Asuncion Gillego that Sy Kiat told
70. Moreover a reading of said case would show that the party alleging the her he has three daughters with his Chinese wife, two of whom—Sook Wah
foreign marriage presented a witness, one Li Ung Bieng, to prove that and Sze Kai Cho—she knows, and one adopted son
matrimonial letters mutually exchanged by the contracting parties constitute 9. However, as petitioners, Yao Kee, failed to establish the marriage of Yao Kee
the essential requisite for a marriage to be considered duly solemnized in with Sy Mat according to the laws of China, they cannot be accorded the
China. Based on his testimony, which as found by the Court is uniformly status of legitimate children but only that of acknowledged natural children.
corroborated by authors on the subject of Chinese marriage, what was left to 10. Petitioners (children of Yao Kee) are natural children, it appearing that at the
be decided was the issue of whether or not the fact of marriage in accordance time of their conception Yao Kee and Sy Kiat were not disqualified by any
with Chinese law was duly proven impediment to marry one another
71. Further, even assuming for the sake of argument that the Court has indeed 11. And they are acknowledged children of the deceased because of Sy Kiat's
taken judicial notice of the law of China on marriage in the aforecited case, recognition of Sze Sook and its extension to Sze Lai Cho and Sy Chun Yen
petitioners however have not shown any proof that the Chinese law or custom who are her sisters of the full blood
obtaining at the time the Sy Joc Lieng marriage was celebrated in 1847 was 12. Private respondents, Sy-Gonzales et al., on the other hand are also the
still the law when the alleged marriage of Sy Kiat to Yao Kee took place in deceased's acknowledged natural children with Asuncion Gillego, a Filipina
1931 or eighty-four (84) years later. with whom he lived for twenty-five (25) years without the benefit of
72. Petitioners moreover cite the case of U.S. v. Memoracion as being applicable marriage.
to the instant case. They aver that the judicial pronouncement in the 13. They have in their favor their father's acknowledgment, evidenced by a
Memoracion case, that the testimony of one of the contracting parties is compromise agreement entered into by and between their parents and
competent evidence to show the fact of marriage, holds true in this case. approved by the Court of First Instance on February 12, 1974 wherein Sy
73. The Memoracion case however is not applicable to the case at bar as said case Kiat not only acknowleged them as his children by Asuncion Gillego but
did not concern a foreign marriage and the issue posed was whether or not likewise made provisions for their support and future inheritance
the oral testimony of a spouse is competent evidence to prove the fact of
marriage in a complaint for adultery.
74. Accordingly, in the absence of proof of the Chinese law on marriage, it should
be presumed that it is the same as ours
75. Since Yao Kee admitted in her testimony that there was no solemnizing
officer as is known here in the when her alleged marriage to Sy Mat was
celebrated, it therefore follows that her marriage to Sy Kiat, even if true,
cannot be recognized in this jurisdiction.

On the issue of CA’s declaration that Sy-Gonzales et al are the natural children of Sy
Kiat:
7. CA found the following evidence of petitioners' filiation:
a. Sy Kiat's Master Card of Registered Alien where the following are
entered: "Children if any: give number of children — Four"; and,
"Name — All living in China”
 012 Eugenio v Velez (Gustilo) restrained of liberty, but the issue of custody remained, which the court a quo had to
May 17, 1990 | Padilla, J. | Jurisdiction & Body of Petition resolve.
PETITIONER: Tomas Eugenio Sr DOCTRINE: Section 19, Batas Pambansa Blg. 129 provides for the exclusive original
RESPONDENTS: Hon. Alejandro Velez, Presiding Judge RTC CDO, et al jurisdiction of the Regional Trial Courts over civil cases. Under Sec. 2, Rule 102 of the
SUMMARY: Unaware of the death on 28 August 1988 of Vitaliana Vargas (Vitaliana), Rules of Court, the writ of habeas corpus may be granted by a Court of First Instance (now
her full blood brothers and sisters, herein private respondents (Vargases') filed on 27 Regional Trial Court). It is an elementary rule of procedure that what controls is not the
September 1988, a petition for habeas corpus before the RTC of Misamis Oriental (Branch caption of the complaint or petition; but the allegations therein determine the nature of the
20, Cagayan de Oro City) alleging that Vitaliana was forcibly taken from her residence action, and even without the prayer for a specific remedy, proper relief may nevertheless
sometime in 1987 and confined by herein petitioner, Tomas Eugenio (Eugenio) in his be granted by the court if the facts alleged in the complaint and the evidence introduced so
palacial residence in Jasaan, Misamis Oriental. Despite her desire to escape, Vitaliana was warrant.
allegedly deprived of her liberty without any legal authority. At the time the petition was
filed, it was alleged that Vitaliana was 25 years of age, single, and living with Eugenio. By a mere reading of the petition the court observed that the allegations in the original
The respondent court in an order dated 28 September 1988 issued the writ of habeas petition as well as in the two amended petitions show that Vitaliana Vargas has been
corpus, but the writ was returned unsatisfied. Eugenio refused to surrender the body of restrained of her liberty and if she were dead then relief was prayed for the custody and
Vitaliana (who had died on 28 August 1988) to the respondent sheriff, reasoning that a burial of said dead person. The amendments to the petition were but elaborations but the
corpse cannot be the subject of habeas corpus proceedings; besides, according to Eugenio, ultimate facts remained the same, hence, this court strongly finds that this court has ample
he had already obtained a burial permit from the Undersecretary of the Department of jurisdiction to entertain and sit on this case as an action for custody and burial of the dead
Health, authorizing the burial at the palace quadrangle of the Philippine Benevolent body because the body of the petition controls and is binding and since this case was raffled
Christian Missionary, Inc. (PBCM), a registered religious sect, of which Eugenio is the to this court to the exclusion of all other courts, it is the primary duty of this court to decide
Supreme President and Founder. Eugenio also alleged that Vitaliana died of heart failure and dispose of this case.”
due to toxemia of pregnancy in his residence on 28 August 1988. As her common law
husband, Eugenio claimed legal custody of her body. These reasons were incorporated in
an explanation filed before the respondent court. Two (2) orders dated 29 and 30
September 1988 were then issued by respondent court, directing delivery of the deceased's
body to a funeral parlor in Cagayan de Oro City and its autopsy. Eugenio (as respondent FACTS:
in the habeas corpus proceedings) filed an urgent motion to dismiss the petition therein, 1. Unaware of the death on 28 August 1988 of Vitaliana Vargas (Vitaliana), her
claiming lack of jurisdiction of the court over the nature of the action under sec. 1(b) of full blood brothers and sisters, herein private respondents (Vargases') filed on
Rule 16 in relation to sec. 2, Rule 72 of the Rules of Court. A special proceeding for habeas 27 September 1988, a petition for habeas corpus before the RTC of Misamis
corpus, Eugenio argued, is not applicable to a dead person but extends only to all cases of Oriental (Branch 20, Cagayan de Oro City) alleging that Vitaliana was
illegal confinement or detention of a live person. Before resolving the motion to dismiss, forcibly taken from her residence sometime in 1987 and confined by herein
the Vargases’ were granted leave to amend their petition. Claiming to have knowledge of petitioner, Tomas Eugenio (Eugenio) in his palacial residence in Jasaan,
the death of Vitaliana only on 28 September 1988 (or after the filing of the habeas corpus Misamis Oriental. Despite her desire to escape, Vitaliana was allegedly
petition), the Vargases’ alleged that Eugenio who is not in any way related to Vitaliana
deprived of her liberty without any legal authority. At the time the petition
was wrongfully interfering with the Vargases duty to bury her. Invoking Arts. 305 and 308
of the Civil Code, the Vargases contended that, as the next of kin in the Philippines, they was filed, it was alleged that Vitaliana was 25 years of age, single, and living
are the legal custodians of the dead body of their sister Vitaliana. An exchange of pleadings with Eugenio.
followed. 2. The respondent court in an order dated 28 September 1988 issued the writ of
The issue is WoN the RTC had jurisdiction over such proceedings?-Yes because the habeas corpus, but the writ was returned unsatisfied. Eugenio refused to
amendments to the petition were but elaborations but the ultimate facts remained the same. surrender the body of Vitaliana (who had died on 28 August 1988) to the
The Court held that ffter the fact of Vitaliana's death was made known to the Vargases’ in respondent sheriff, reasoning that a corpse cannot be the subject of habeas
the habeas corpus proceedings, amendment of the petition for habeas corpus, not dismissal, corpus proceedings; besides, according to Eugenio, he had already obtained
was proper to avoid multiplicity of suits. Amendments to pleadings are generally favored a burial permit from the Undersecretary of the Department of Health,
and should be liberally allowed in furtherance of justice in order that every case may so
authorizing the burial at the palace quadrangle of the Philippine Benevolent
far as possible be determined on its real facts and in order to expedite the trial of cases or
prevent circuity of action and unnecessary expense, unless there are circumstances such as Christian Missionary, Inc. (PBCM), a registered religious sect, of which
inexcusable delay or the taking of the adverse party by surprise or the like, which justify a Eugenio is the Supreme President and Founder.
refusal of permission to amend. As correctly alleged by the Vargases, the writ of habeas 3. Eugenio also alleged that Vitaliana died of heart failure due to toxemia of
corpus as a remedy became moot and academic due to the death of the person allegedly pregnancy in his residence on 28 August 1988. As her common law husband,
 Eugenio claimed legal custody of her body. These reasons were incorporated the basis of the award. Since there was no surviving spouse, ascendants or
in an explanation filed before the respondent court. Two (2) orders dated 29 descendants, the brothers and sisters were preferred over Eugenio who was
and 30 September 1988 were then issued by respondent court, directing merely a common law spouse, the latter being himself legally married to
delivery of the deceased's body to a funeral parlor in Cagayan de Oro City another woman.
and its autopsy. 9. On 23 January 1989, a new petition for review with application for a
4. Eugenio (as respondent in the habeas corpus proceedings) filed an urgent temporary restraining order and/or preliminary injunction was filed with this
motion to dismiss the petition therein, claiming lack of jurisdiction of the Court by Eugenio and raised therein were pure questions of law, basically
court over the nature of the action under sec. 1(b) of Rule 16 in relation to Identical to those raised in the earlier petition hence, the consolidation of both
sec. 2, Rule 72 of the Rules of Court. A special proceeding for habeas cases. Eugenio filed an urgent motion for the issuance of an injunction to
corpus, Eugenio argued, is not applicable to a dead person but extends maintain status quo pending appeal, which this Court denied in a resolution
only to all cases of illegal confinement or detention of a live person. dated 23 February 1989 stating that "Tomas Eugenio has so far failed to
5. Before resolving the motion to dismiss, the Vargases’ were granted leave sufficiently establish a clear legal right to the custody of the dead body of
to amend their petition. Claiming to have knowledge of the death of Vitaliana Vargas, which now needs a decent burial." The petitions were then
Vitaliana only on 28 September 1988 (or after the filing of the habeas submitted for decision without further pleadings.
corpus petition), the Vargases’ alleged that Eugenio who is not in any
way related to Vitaliana was wrongfully interfering with the Vargases ISSUE/s:
duty to bury her. Invoking Arts. 305 and 308 of the Civil Code, the 1. WoN the Vargases or Eugenio should have custody of Vitaliana?- The
Vargases contended that, as the next of kin in the Philippines, they are Vargases because Eugenio was married to another woman and their
the legal custodians of the dead body of their sister Vitaliana. An relationship was merely of common law husband and wife
exchange of pleadings followed. The motion to dismiss was finally 2. WoN the RTC had jurisdiction over such proceedings?- Yes because the
submitted for resolution on 21 October 1988. amendments to the petition were but elaborations but the ultimate facts
6. In the absence of a restraining order from this Court, proceedings continued remained the same, hence, this court strongly finds that this court has ample
before the respondent court; the body was placed in a coffin, transferred to jurisdiction to entertain and sit on this case as an action for custody and burial
the Greenhills Memorial Homes in Cagayan de Oro City, viewed by the of the dead body because the body of the petition controls and is binding and
presiding Judge of respondent court, and examined by a duly authorized since this case was raffled to this court to the exclusion of all other courts, it
government pathologist. The Motion to Dismiss of Eugenio was denied by is the primary duty of this court to decide and dispose of this case
the Trial Court.
7. Citing Sections 19 and 20 of Batas Pambansa Blg. 129 (the Judiciary RULING: WHEREFORE, the decision appealed from is AFFIRMED. Both
Reorganization Act of 1981), Sections 5 and 6 of Rule 135 of the Rules of petitions are hereby DISMISSED. No Costs.
Court, Articles 305 and 308 in relation to Article 294 of the Civil Code and
Section 1104 of the Revised Administrative Code, the decision stated: “By a RATIO:
mere reading of the petition the court observed that the allegations in the 1. Section 19, Batas Pambansa Blg. 129 provides for the exclusive original
original petition as well as in the two amended petitions show that Vitaliana jurisdiction of the Regional Trial Courts over civil cases. Under Sec. 2,
Vargas has been restrained of her liberty and if she were dead then relief Rule 102 of the Rules of Court, the writ of habeas corpus may be granted
was prayed for the custody and burial of said dead person. The amendments by a Court of First Instance (now Regional Trial Court). It is an
to the petition were but elaborations but the ultimate facts remained the elementary rule of procedure that what controls is not the caption of the
same, hence, this court strongly finds that this court has ample jurisdiction complaint or petition; but the allegations therein determine the nature
to entertain and sit on this case as an action for custody and burial of the of the action, and even without the prayer for a specific remedy, proper
dead body because the body of the petition controls and is binding and since relief may nevertheless be granted by the court if the facts alleged in the
this case was raffled to this court to the exclusion of all other courts, it is complaint and the evidence introduced so warrant.
the primary duty of this court to decide and dispose of this case.” 2. When the petition for habeas corpus was filed before the court a quo, it was
8. Satisfied with its jurisdiction, the respondent court then proceeded to the not certain whether Vitaliana was dead or alive. While habeas corpus is a writ
matter of rightful custody over the dead body, (for purposes of burial of right, it will not issue as a matter of course or as a mere perfimetory
thereof). The order of preference to give support under Art. 294 was used as operation on the filing of the petition. Judicial discretion is exercised in its
 issuance, and such facts must be made to appear to the judge to whom the committed or caused mutually by spouses. The Penal Code article, it is said,
petition is presented as, in his judgment, prima facie entitle the petitioner to makes no distinction between a couple whose cohabitation is sanctioned by
the writ. While the court may refuse to grant the writ if the petition is a sacrament or legal tie and another who are husband and wife de facto. But
insufficient in form and substance, the writ should issue if the petition this view cannot even apply to the facts of the case at bar. We hold that
complies with the legal requirements and its averments make a prima the provisions of the Civil Code, unless expressly providing to the
facie case for relief. However, a judge who is asked to issue a writ of contrary as in Article 144, when referring to a "spouse" contemplate a
habeas corpus need not be very critical in looking into the petition for lawfully wedded spouse. Eugenio vis-a-vis Vitaliana was not a lawfully-
very clear grounds for the exercise of this jurisdiction. The latter's power wedded spouse to her; in fact, he was not legally capacitated to marry
to make full inquiry into the cause of commitment or detention will her in her lifetime.
enable him to correct any errors or defects in the petition. 7. Custody of the dead body of Vitaliana was correctly awarded to her
3. After the fact of Vitaliana's death was made known to the Vargases’ in the surviving brothers and sisters (the Vargases). Section 1103 of the Revised
habeas corpus proceedings, amendment of the petition for habeas corpus, Administrative Code provides: Sec. 1103. Persons charged with duty of
not dismissal, was proper to avoid multiplicity of suits. Amendments to burial.-The immediate duty of burying the body of a deceased person,
pleadings are generally favored and should be liberally allowed in regardless of the ultimate liability for the expense thereof, shall devolve
furtherance of justice in order that every case may so far as possible be upon the persons hereinbelow specified: (b) If the deceased was an
determined on its real facts and in order to expedite the trial of cases or unmarried man or woman, or a child, and left any kin, the duty of burial
prevent circuity of action and unnecessary expense, unless there are shall devolve upon the nearest of kin of the deceased, if they be adults
circumstances such as inexcusable delay or the taking of the adverse and within the Philippines and in possession of sufficient means to defray
party by surprise or the like, which justify a refusal of permission to the necessary expenses.
amend. As correctly alleged by the Vargases, the writ of habeas corpus
as a remedy became moot and academic due to the death of the person
allegedly restrained of liberty, but the issue of custody remained, which
the court a quo had to resolve.
4. Eugenio claims he is the spouse contemplated under Art. 294 of the Civil
Code, the term spouse used therein not being preceded by any qualification;
hence, in the absence of such qualification, he is the rightful custodian of
Vitaliana's body. Vitaliana's brothers and sisters contend otherwise. Indeed,
Philippine Law does not recognize common law marriages. A man and
woman not legally married who cohabit for many years as husband and wife,
who represent themselves to the public as husband and wife, and who are
reputed to be husband and wife in the community where they live may be
considered legally mauled in common law jurisdictions but not in the
Philippines.
5. While it is true that our laws do not just brush aside the fact that such
relationships are present in our society, and that they produce a community
of properties and interests which is governed by law, authority exists in case
law to the effect that such form of co-ownership requires that the man and
woman living together must not in any way be incapacitated to contract
marriage. In any case, Eugenio has a subsisting marriage with another
woman, a legal impediment which disqualified him from even legally
marrying Vitaliana.
6. There is a view that under Article 332 of the Revised Penal Code, the term
"spouse" embraces common law relation for purposes of exemption from
criminal liability in cases of theft, swindling and malicious mischief
 013 Board of Commissioners v. Dela Rosa (Hilario) to Secs. 45 (c), and (d) and (e) of Commonwealth Act No. 613, as amended, also
May 31, 1991 | Bidin, J. | Marriage, Adoption and Family Relations known as the Immigration Act of 1940.
Note: sorry it’s a really long case and I think the procedure is really important
please bear with this long digest L Summary box is okay for facts but please read all
On August 15, 1990, petitioner Commissioner Domingo of the Commission of
issues and the whole ratio! (tbh if di kaya whole ratio just pls make sure to read full
Immigration and Deportation issued a mission order commanding the arrest of
last page, that’s the one related to marriage and family relations)
respondent William Gatchalian. He appeared before Commissioner Domingo on
PETITIONER: BOC (Commission on Immigration and Deportation August 20, 1990 and was released on the same day upon posting P200,000.00
RESPONDENTS: Hon. Joselito Dela Rosa, Presiding Judge RTC Manila, cash bond. On August 29, 1990, William Gatchalian filed a petition
William T. Gatchalian for certiorari and prohibition with injunction before the Regional Trial Court of
Manila, Br. 29, presided by respondent Judge dela Rosa. On September 4, 1990,
SUMMARY: In 1960, Santiago Gatchalian is a native born Filipino citizen Board of Commissioners filed a motion to dismiss the petition for certiorari and
following the citizenship of his natural mother, Marciana Gatchalian. He testified prohibition wit injunction, alleging that respondent judge has no jurisdiction
before the Citizen Evaluation Board that he had 5 kids with his wife Chu Gim over the Board of Commissioners and/or the Board of Special Inquiry.
Tee, namely Jose, Gloria, Francisco (dad of William and Johnson), Elena, and Nonetheless, respondent judge dela Rosa issued the assailed order dated
Benjamin. William is the son of Francisco and the grandson of Santiago.In 1961, September 7, 1990, denying the motion to dismiss. Meanwhile, on September 6,
when William was 12, he arrived in Manila from Hong Kong with Gloria, 1990, William Gatchalian's wife and minor children filed before the Regional
Francisco, and Johnson (his brother). They carried with them Certificates of Trial Court of Valenzuela, Metro Manila, Br. 172, presided by respondent judge
Registration and Identity issued by the Philippine Consulate in Hong Kong based Capulong a case for injunction with writ of preliminary injunction. The
on a cablegram bearing the signature of the incumbent Secretary of Foreign complaint alleged, among others, that the Board of Commissioners acted
Affairs. They all sought admission as Filipino citizens. without or in excess of jurisdiction in the institution of deportation proceedings
against William. On the same day, respondent Capulong issued the questioned
After investigation, the Board of Special Inquiry No. 1 rendered a decision dated temporary restraining order restraining Board of Commissioners from
July 6, 1961, admitting William Gatchalian and his companions as Filipino continuing with the deportation proceedings against William Gatchalian. The
citizens. However, the Secretary of Justice issued a Memorandum setting aside SolGen now files this petition for certiorari before the SC. William
all decisions rendered by the Board of Commissioners on appeal or on review Gatchalian also files a counter petition.
motu proprio of decisions of the Board of Special Inquiry. The same
memorandum directed the Board of Commissioners to review all cases where Issue: WoN William is a Filipino following the citizenship of his father—YES.
entry was allowed on the ground that the entrant was a Philippine citizen,
including William’s case. The new Board of Commissioners reversed the
decision declaring William a citizen and ordered his and his companions’
In Miciano vs. Brimo this Court held that in the absence of evidence to the
exclusion (due to forged cablegram by the then Secretary of Foreign Affairs, . . .,
contrary, foreign laws on a particular subject are presumed to be the same as
which was dispatched to the Philippine Consulate in Hong Kong authorizing the
those of the Philippines. In the case at bar, there being no proof of Chinese
registration of applicants as P.I. citizens.). A warrant of exclusion was issued and
law relating to marriage, there arises the presumption that it is the same as
the decision became final and executory. Sometime in the following year, the
that of Philippine law. The lack of proof of Chinese law on the matter
Gatchalians filed a motion for re-hearing with the Board of Special Inquiry where
cannot be blamed on Santiago Gatchalian much more on respondent
the deportation case against them was assigned. In 1973, the Board of Special
William Gatchalian who was then a twelve-year old minor. The fact is, as
Inquiry recommended to acting Commissioner Nituda the reversal of the decision
records indicate, Santiago was not pressed by the Citizenship Investigation
ordering their exclusion and deportation. Nituda issued an order reaffirming the
Board to prove the laws of China relating to marriage, having been content
decision declaring the Gatchalians Filipino Citizens.
with the testimony of Santiago that the Marriage Certificate was lost or
destroyed during the Japanese occupation of China.
In 1990, the acting director of the National Bureau of Investigation wrote the
Secretary of Justice recommending that respondent Gatchalian along with the
other applicants be charged with violation of Sec. 37 (a), pars. 1 and 2, in relation Neither was Francisco Gatchalian's testimony subjected to the same scrutiny by
 the Board of Special Inquiry. Nevertheless, the testimonies of Santiago 4. On July 6, 1962, the new Board of Commissioners reversed the decision
Gatchalian and Francisco Gatchalian before the Philippine consular and declaring William a citizen, and ordered his and his companions’ exclusion.
immigration authorities regarding their marriages, birth and relationship to A warrant of exclusion was issued and the decision became final and
each other are not self-serving but are admissible in evidence as statements executory.
or declarations regarding family reputation or tradition in matters of a. This was due to the alleged forged cablegram by the then
pedigree. Secretary of Foreign Affairs which was dispatched to the
Philippine Consulate in Hong Kong authorizing the
registration of applicants as P.I. citizens.
b. In Arocha v. Vivo, it was settled that William Gatchalian is a
DOCTRINE: Legitimate children get the citizenship of their father while Chinese Citizen and the SC sustained the validity of the July 6,
illegitimate children get the citizenship of their mother. This is why the validity 1962 decree. (but later the SC will say that this case only
of a marriage is important in determining citizenship. settled the date of promulgation of the order, and not the fact
of citizenship of William Gatchalian. IN CASE MA’AM
Thus, every intendment of law or facts leans toward the validity of marriage, ASKS!!!)
the indissolubility of the marriage bonds, the legitimacy of children, the
community of property during marriage, the authority of parents over their 5. Sometime in the following year in 1973, the Gatchalians filed a motion for
children, and the validity of defense for any member of the family in case of re-hearing with the Board of Special Inquiry where the deportation case
unlawful aggression." against them was assigned.
a. In 1973, the Board of Special Inquiry recommended to acting
Commissioner Nituda the reversal of the decision ordering their
FACTS: exclusion and deportation. Nituda issued an order reaffirming the
1. In 1960, Santiago Gatchalian is a native born Filipino citizen following the decision declaring the Gatchalians Filipino Citizens.
citizenship of his natural mother, Marciana Gatchalian. He testified before 6. In 1990, the acting director of the National Bureau of Investigation wrote the
the Citizen Evaluation Board that he had 5 kids with his wife Chu Gim Tee, Secretary of Justice recommending that respondent Gatchalian along with the
namely Jose, Gloria, Francisco (dad of William and Johnson), Elena, and other applicants be charged with violation of Sec. 37 (a), pars. 1 and 2, in
Benjamin. William is the son of Francisco and the grandson of Santiago. relation to Secs. 45 (c), and (d) and (e) of Commonwealth Act No. 613, as
amended, also known as the Immigration Act of 1940.
2. In 1961, when William was 12, he arrived in Manila from Hong Kong with a. The Secretary of Justice indorsed the recommendation of the NBI to
Gloria, Francisco, and Johnson (his brother). They carried with them the Commissioner of Immigration for investigation and immediate
Certificates of Registration and Identity issued by the Philippine Consulate action.
in Hong Kong based on a cablegram bearing the signature of the incumbent 7. On August 15, 1990, petitioner Commissioner Domingo of the Commission
Secretary of Foreign Affairs. They all sought admission as Filipino citizens. of Immigration and Deportation issued a mission order commanding the
arrest of respondent William Gatchalian. He appeared before Commissioner
3. After investigation, the Board of Special Inquiry No. 1 rendered a decision Domingo on August 20, 1990 and was released on the same day upon
dated July 6, 1961, admitting William Gatchalian and his companions as posting P200,000.00 cash bond.
Filipino citizens. 8. On August 29, 1990, William Gatchalian filed a petition for certiorari and
a. However, the Secretary of Justice issued a Memorandum setting prohibition with injunction before the Regional Trial Court of Manila, Br.
aside all decisions rendered by the Board of Commissioners on 29, presided by respondent Judge dela Rosa.
appeal or on review motu proprio of decisions of the Board of 9. On September 4, 1990, Board of Commissioners filed a motion to dismiss
Special Inquiry. the petition for certiorari and prohibition wit injunction, alleging that
b. The same memorandum directed the Board of Commissioners to respondent judge has no jurisdiction over the Board of Commissioners
review all cases where entry was allowed on the ground that the and/or the Board of Special Inquiry.
entrant was a Philippine citizen, including William’s case. 10. Nonetheless, respondent judge dela Rosa issued the assailed order dated
September 7, 1990, denying the motion to dismiss.
 11. Meanwhile, on September 6, 1990, William Gatchalian's wife and minor 3. WoN respondent judge Capulong should have dismissed Civil Case for
children filed before the Regional Trial Court of Valenzuela, Metro Manila, forum-shopping, since the question of William’s citizenship was already
Br. 172, presided by respondent judge Capulong a case for injunction with decided in Arocha v Vivo—NO, no res judicata because FIRST OF ALL,
writ of preliminary injunction. RES JUDICATA DOES NOT APPLY TO QUESTIONS OF
a. The complaint alleged, among others, that the Board of CITIZENSHIP, and SECOND, that case did not dispose of the question
Commissioners acted without or in excess of jurisdiction in the of citizenship; it only touched on the date of promulgation and he was
institution of deportation proceedings against William. not a party to that case, that case involved his uncle Pedro (whether the
12. On the same day, respondent Capulong issued the questioned temporary decision was rendered on July 6, 1962 or on July 20, 1962 it appearing that
restraining order restraining Board of Commissioners from continuing with the figure (date) "20" was erased and over it was superimposed the figure
the deportation proceedings against William Gatchalian. "6" thereby making the decision fall within the one-year reglementary period
13. The Solicitor General now files this petition for certiorari BEFORE THE from July 6, 1961 within which the decision may be reviewed).
SC seeking 1) to set aside the Resolution/Temporary Restraining Order 4. WoN the arrest of William followed as a matter of consequence based on the
dated September 7, 1990, issued by respondent Judge de la Rosa which warrant of exclusion issued on July 6, 1962—NO, a warrant of arrest
denied Board of Commissioner’s motion to dismiss and restrained them issued by the Commissioner of Immigration, to be valid, must be for the
from commencing or continuing with any of the proceedings which sole purpose of executing a final order of deportation.
would lead to the deportation of respondent William Gatchalian, as well
as the Order of respondent Judge Capulong dated September 6, 1990 RULING: SC affirmed the lower courts decision. Pwede rin wherefore.
which likewise enjoined Board of Commissioners from proceeding with
the deportation charges against respondent Gatchalian, and 2) to RATIO:
prohibit respondent judges from further acting in the aforesaid civil Issue 1: RTC HAS JURISDICTION
cases. 1. Petitioners argue that under Sec. 9 (3) of BP 129, it is the Court of Appeals
14. In his counter-petition, William Gatchalian alleges among others that: which has exclusive appellate jurisdiction over all final judgments or orders
1) assuming that the evidence on record is not sufficient to declare him a of quasi-judicial agencies, boards or commissions, such as the Board of
Filipino citizen, petitioners have no jurisdiction to proceed with the Commissioners and the Board of Special Inquiry.
deportation case until the courts shall have finally resolved the question 2. Respondent, on the other hand, contends that petitioners are not quasi-judicial
of his citizenship; 2) petitioners can no longer judiciously and fairly agencies and are not in equal rank with Regional Trial Courts.
resolve the question of respondent's citizenship in the deportation case 3. Under Sec. 21 (1) of Batas Pambansa Blg. 129, the Regional Trial Courts
because of their bias, pre-judgment and prejudice against him; and 3) have concurrent jurisdiction with this Court and the Court of Appeals to issue
the ground for which he is sought to be deported has already prescribed. "writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and
injunction which may be enforced in any part of their respective regions, . .
ISSUE/s: ." Thus, the RTCs are vested with the power to determine whether or not there
1. WoN the RTC has jurisdiction to hear the petition for certiorari over the has been a grave abuse of discretion on the part of any branch or
deporation case of William – YES, because the RTC and the CA have instrumentality of the government.
concurrent jurisdiction to issue writs of certiorari prohibition 4. It is true that under Sec. 9 (3) of Batas Pambansa Blg. 129, the Court of
mandamus quo warranto habeas corpus and injunction. Appeals is vested with —
2. WoN respondent judge dela Rosa gravely abused his discretion in ruling that
the issues raised in the deportation proceedings are beyond the competence (3) Exclusive appellate jurisdiction over all final judgments,
and jurisdiction of the Board of Commissioners—NO, because Judicial decisions, resolutions, order, or awards of Regional Trial Courts
intervention, should be granted only in cases where the "claim of and quasi-judicial agencies, instrumentalities, board or
citizenship is so substantial that there are reasonable grounds to believe commission, except those falling within the appellate jurisdiction
that the claim is correct. In other words, the remedy should be allowed only of the Supreme Court in accordance with the Constitution, the
on sound discretion of a competent court in a proper proceeding. It provisions of this Act, and of sub-paragraph (1) of the third
appearing from the records that respondent's claim of citizenship is paragraph of and sub-paragraph (4) of the fourth paragraph of
allowed. Section 17 of the Judiciary Act of 1948.
 5. It does not provide, however, that said exclusive appellate jurisdiction justice in allowing the deportation proceedings to continue, granting him
of the Court of Appeals extends to all quasi-judicial agencies. The quasi- the remedy only after the Board has finished its investigation of his
judicial bodies whose decisions are exclusively appealable to the Court of undesirability.
Appeals are those which under the law, Republic Act No. 5434, or their
enabling acts, are specifically appealable to the Court of Appeals (decisions . . . And if the right (to peace) is precious and valuable at all, it must
of Land Registration Commission, Social Security Commission, Civil also be protected on time, to prevent undue harassment at the hands of
Aeronautics Board, Patent Office, Agricultural Invevntion Board). ill-meaning or misinformed administrative officials. Of what use is this
6. The Bureau of Immigration (or CID) is not among those quasi-judicial much boasted right to peace and liberty if it can be availed of only after
agencies specified by law whose decisions, orders, and resolutions are the Deportation Board has unjustly trampled upon it, besmirching the
directly appealable to the Court of Appeals. In fact, its decisions are citizen's name before the bar of public opinion?
subject to judicial review in accordance with Sec. 25, Chapter 4, Book VII
of the 1987 Administrative Code, which provides as follows: 10. The doctrine of primary jurisdiction of petitioners Board of
Commissioners over deportation proceedings is, therefore, not without
Sec. 25. Judicial Review.—(1) Agency decisions shall be subject to judicial exception.
review in accordance with this chapter and applicable laws. xxx 11. Judicial intervention, however, should be granted only in cases where
the "claim of citizenship is so substantial that there are reasonable
(6) The review proceeding shall be filed in the court specified in the statute grounds to believe that the claim is correct. In other words, the remedy
or, in the absence thereof, in any court of competent jurisdiction in should be allowed only on sound discretion of a competent court in a proper
accordance with the provisions on venue of the Rules of Court. proceeding.
12. It appearing from the records that respondent's claim of citizenship is
7. The law did not intend to raise all quasi-judicial bodies to the same level or substantial, as We shall show later, judicial intervention should be
rank of the RTC except those specifically provided for under the law as allowed.
aforestated. As the Bureau of Immigration is not of equal rank as the Issue 3: NO RES JUDICATA
RTC, its decisions may be appealable to, and may be reviewed through
a special civil action for certiorari by, the RTC 13. In Moy Ya Lim vs. Commissioner of Immigration and in Lee vs.
Commissioner of Immigration, this Court declared that:
Issue 2: JUDICIAL INTERVENTION WARRANTED
8. True, it is beyond cavil that the Bureau of Immigration has the exclusive (e)verytime the citizenship of a person is material or indispensable in a
authority and jurisdiction to try and hear cases against an alleged alien, and judicial or administrative case, whatever the corresponding court or
in the process, determine also their citizenship. And a mere claim of administrative authority decides therein as to such citizenship is generally
citizenship cannot operate to divest the Board of Commissioners of its not considered as res adjudicata, hence it has to be threshed out again
jurisdiction in deportation proceedings. However, the rule enunciated in the and again as the occasion may demand.
above-cases admits of an exception, at least insofar as deportation
proceedings are concerned. 14. An exception to the above rule was laid by this Court in Burca vs. Republic
9. In Chua Hiong vs. Deportation Board: When the evidence submitted by a (MEANING CITIZENSHIP IS CONSIDERED RES JUDICATA):
respondent is conclusive of his citizenship, the right to immediate review We declare it to be a sound rule that where (1) the citizenship of a party in a
should also be recognized and the courts should promptly enjoin the case is definitely resolved by a court or by an administrative agency, as
deportation proceedings. A citizen is entitled to live in peace, without a material issue in the controversy, (2) after a full-blown hearing with
molestation from any official or authority, and if he is disturbed by a the active participation of the Solicitor General or his authorized
deportation proceeding, he has the unquestionable right to resort to the representative, and (3) this finding or the citizenship of the party is
courts for his protection, either by a writ of habeas corpus or of affirmed by this Court, the decision on the matter shall constitute
prohibition, on the legal ground that the Board lacks jurisdiction. If he conclusive proof of such party's citizenship in any other case or
is a citizen and evidence thereof is satisfactory, there is no sense nor proceeding.
 Gatchalian included. Paragraphs 1 and 3 of the mission order directs the
But it is made clear that in no instance will a decision on the question of Intelligence Agents/Officers to:
citizenship in such cases be considered conclusive or binding in any a. Make a warrantless arrest under the Rules of Criminal Procedure,
other case or proceeding, unless obtained in accordance with the Rule 113, Sec. 5, for violation of the Immigration Act, Sec. 37,
procedure herein stated. para. a; Secs. 45 and 46 Administrative Code;
b. Deliver the suspect to the Intelligence Division and immediately
15. Thus, in order that the doctrine of res judicata may be applied in cases of conduct custodial interrogation, after warning the suspect that he
citizenship, the following must be present: 1) a person's citizenship must be has a right to remain silent and a right to counsel; . . .
raised as a material issue in a controversy where said person is a party; 2) 22. The mission order/warrant of arrest made no mention that the same
the Solicitor General or his authorized representative took active part in the was issued pursuant to a final order of deportation or warrant of
resolution thereof, and 3) the finding or citizenship is affirmed by this exclusion.
Court.
16. Gauged by the foregoing, We find the pre-conditions set forth SC: William is a citizen (not pleaded as issue, but SC opted to resolve the issue
in Burca inexistent in the Arocha and Vivo cases relied upon by Board of right then and there and not to remand it anymore)
Commissioners. Indeed, respondent William Gatchalian was not even a 23. In the facts, it was shown that there was a motion for re-hearing, and acting
party in said cases (the only party to those cases was Pedro Gatchalian, Secretary Nituda declared William Gatchalian a citizen by affirming the first
his uncle). order issued.
24. That order is the last official act of the government on the basis of which
Issue 4: ARREST DOES NOT AUTOMATICALLY FOLLOW William Gatchalian continually exercised the rights of a Filipino citizen to
the present. Consequently, the presumption of citizenship lies in favor of
17. In matters of implementing the Immigration Act insofar as deportation of William.
aliens are concerned, the Commissioner of Immigration may issue 25. The dissenting opinions of my esteemed brethrens, Messrs. Justices F.P.
warrants of arrest only after a determination by the Board of Feliciano and H.G. Davide, Jr., proposing to re-open the question of
Commissioners of the existence of the ground for deportation as charged citizenship of Santiago Gatchalian at this stage of the case, where it is not
against the alien. even put in issue, is quite much to late. As stated above, the records of the
18. In other words, a warrant of arrest issued by the Commissioner of Bureau of Immigration show that as of July 20, 1960, Santiago Gatchalian
Immigration, to be valid, must be for the sole purpose of executing a final had been declared to be a Filipino citizen. It is a final decision that forecloses
order of deportation. a re-opening of the same 30 years later.
19. A warrant of arrest issued by the Commissioner of Immigration for 26. Furthermore, petitioners' position is not enhanced by the fact that
purposes of investigation only, as in the case at bar, is null and void for respondent's arrest came twenty-eight (28) years after the alleged cause
being unconstitutional. of deportation arose. Section 37 (b) of the Immigration Act states that
20. As We held in Qua Chee Gan vs. Deportation Board, "(t)he constitution deportation "shall not be effected . . . unless the arrest in the deportation
does not distinguish warrants between a criminal case and proceedings is made within five (5) years after the cause of deportation
administrative proceedings. And if one suspected of having committed a arises." BUT Sec. 1, Act No. 3326 [1926], as amended, (Prescription for
crime is entitled to a determination of the probable cause against him, by a Violations Penalized by Special Acts and Municipal Ordinances)
judge, why should one suspected of a violation of an administrative nature CHANGED THE 5R YEAR PERIOD TO 8 YEARS PLEASE NOTE!!!
deserve less guarantee?" It is not indispensable that the alleged alien be 27. In the case at bar, petitioners' alleged cause of action and deportation
arrested for purposes of investigation. If the purpose of the issuance of the against herein respondent arose in 1962. However, the warrant of arrest
warrant of arrest is to determine the existence of probable cause, surely, it of respondent was issued by Commissioner Domingo only on August 15,
cannot pass the test of constitutionality for only judges can issue the same 1990 — 28 long years after. It is clear that petitioners' cause of action has
21. A reading of the mission order/warrant of arrest issued by the already prescribed and by their inaction could not now be validly
Commissioner of Immigration, clearly indicates that the same was enforced by petitioners against respondent William Gatchalian.
issued only for purposes of investigation of the suspects, William Furthermore, the warrant of exclusion dated July 6, 1962 was already recalled
and the Identification certificate of respondent, among others, was
 revalidated on March 15, 1973 by the then Acting Commissioner Nituda. relationship to each other are not self-serving but are admissible in
28. The Court, therefore, holds that the period of effecting deportation of an alien evidence as statements or declarations regarding family reputation or
after entry or a warrant of exclusion based on a final order of the BSI or BOC tradition in matters of pedigree (Sec. 34, Rule 130). Furtheremore, this
are not imprescriptible. The law itself provides for a period of prescription. salutary rule of evidence finds support in substantive law. Thus, Art. 267 of
29. "Although a deportation proceeding does not partake of the nature of a the Civil Code provides:
criminal action, however, considering that it is a harsh and extraordinary a. Art. 267. In the absence of a record of birth, authentic
administrative proceeding affecting the freedom and liberty of a person, the document, final judgment or possession of status, legitimate
constitutional right of such person to due process should not be denied. Thus, filiation may be proved by any other means allowed by the
the provisions of the Rules of Court of the Philippines particularly on criminal Rules of Court and special laws. (See also Art. 172 of the Family
procedure are applicable to deportation proceedings." Code)
SC: WILLIAM IS FILIPINO BECAUSE HE IS A LEGITIMATE CHILD OF 35. Consequently, the testimonies/affidavits of Santiago Gatchalian and
HIS FATHER, A FILIPINO. Francisco Gatchalian aforementioned are not self-serving but are
competent proof of filiation (Art. 172 [2], Family Code).
30. Board of Commissioners (still) claim that William is an alien. In support of 36. Philippine law, following the lex loci celebrationis, adheres to the rule that
their position, petitioners point out that Santiago Gatchalian's marriage with a marriage formally valid where celebrated is valid everywhere.
Chu Gim Tee in China as well as the marriage of Francisco (father of 37. Referring to marriages contracted abroad, Art. 71 of the Civil Code (now
William) Gatchalian to Ong Chiu Kiok, likewise in China, were not Art. 26 of the Family Code) provides that "(a)ll marriages performed
supported by any evidence other than their own self-serving testimony nor outside of the Philippines in accordance with the laws in force in the
was there any showing what the laws of China were. For the said marriages country where they were performed, and valid there as such, shall also
to be valid in this country, it should have been shown that they were valid be valid in this country . . ." And any doubt as to the validity of the
by the laws of China wherein the same were contracted. There being none, matrimonial unity and the extent as to how far the validity of such marriage
petitioners conclude that the aforesaid marriages cannot be considered valid. may be extended to the consequences of the coverture is answered by Art.
Hence, Santiago's children, including Francisco, followed the citizenship of 220 of the Civil Code in this manner: "In case of doubt, all presumptions
their mother, having been born outside of a valid marriage. Similarly, the favor the solidarity of the family.
validity of the Francisco's marriage not having been demonstrated, William 38. Thus, every intendment of law or facts leans toward the validity of
and Johnson followed the citizenship of their mother, a Chinese national. marriage, the indissolubility of the marriage bonds, the legitimacy of
31. After a careful consideration of petitioner's argument, We find that it children, the community of property during marriage, the authority of
cannot be sustained. parents over their children, and the validity of defense for any member
32. In Miciano vs. Brimo this Court held that in the absence of evidence to the of the family in case of unlawful aggression."
contrary, foreign laws on a particular subject are presumed to be the same 39. Bearing in mind the "processual presumption" enunciated in Miciano and
as those of the Philippines. In the case at bar, there being no proof of other cases, he who asserts that the marriage is not valid under our law
Chinese law relating to marriage, there arises the presumption that it is bears the burden of proof to present the foreign law.
the same as that of Philippine law. 40. Having declared the assailed marriages as valid, respondent William
33. The lack of proof of Chinese law on the matter cannot be blamed on Gatchalian follows the citizenship of his father Francisco, a Filipino, as
Santiago Gatchalian much more on respondent William Gatchalian a legitimate child of the latter. Francisco, in turn is likewise a Filipino
who was then a twelve-year old minor. The fact is, as records indicate, being the legitimate child of Santiago Gatchalian who (the latter) is
Santiago was not pressed by the Citizenship Investigation Board to admittedly a Filipino citizen whose Philippine citizenship was
prove the laws of China relating to marriage, having been content with recognized by the Bureau of Immigration in an order dated July 12,
the testimony of Santiago that the Marriage Certificate was lost or 1960.
destroyed during the Japanese occupation of China.
34. Neither was Francisco Gatchalian's testimony subjected to the same scrutiny
by the Board of Special Inquiry. Nevertheless, the testimonies of Santiago
Gatchalian and Francisco Gatchalian before the Philippine consular
and immigration authorities regarding their marriages, birth and
 001 In re: Estate of Johnson (Valle edited by Hirang) country where it may be situate."
16 November 1918 | Street, J. | Succession

In the matter of the estate of Emil. H. Johnson, Ebba Ingeborg Johnson FACTS:
45. Emil Johnson (Johnson) is a native of Sweden and a naturalized citizen of the
SUMMARY: US. He died in manila leaving a holographic will where he disposed of an
Johnson was born in Sweden and a naturalized US citizen. He was married in the estate that was valued at Php 231, 800. The will was written in his pwn riting
US to Ackenson and had their daughter, Ebba. When Johnson joined the army, he and signed by him with two witnesses (instead of three as required by sec
went to the Philippines and stayed there after. He got divorced from Ackenson and 616 of the Code of Civil Procedure). It wasn’t executed in conformity with
married Alejandra Ibanez who had three of his children. He later had two other the law applicable to wills excuted by inhabitants of these Islands and hence
children from Simeona Ibanez. When Johnson died, his holographic will was couldn’t be proved under the Code of Civil Procedure.
probated despite the fact that he only had two witnesses instead of three. However, 46. A petition was presented in the CFI of Manila for the probate of the will on
a petition was made stating that the will was made in conformity with US Law, the ground that Johnson at time of death was the citizen of Illois, US; that the
thus valid in the Philippines as provided for in Section 636 in the Code of Civil will was duly executed in that state and hence could properly be probated
Procedure. The will was later probated and declared legal, however Ebba entered pursuant to the Code of Civil Procedure which says:
an appearance, claiming that as a legitimate child she cannot be deprived of the 47. A will made here by an alien -- A will made within the Philippine Islands by
legitime which she is entitled to as provided by Philippine law. She moved to a citizen or subject of another state or country, which is executed in
annul the decree of probate and put the estate into intestate administration in order accordance with the law of the state or country of which he is a citizen or
for her to claim the estate as the sole legitimate heir of her father. What is being subject, and which might be proved and allowed by the law of his own state
contested in Johnson’s citizenship and what law should be applied. or country, may be proved, allowed, and recorded in the Philippine Islands,
and shall have the same effect as if executed according to the laws of these
The issue is whether or not the law of Illinois should apply in the case at bar Islands.
48. The hearing was set and three weeks of publication of notice was ordeded in
The SC held in the affirmative Johnson is a citizen of Illinois and a resident of the the Manila Daily Bulletin. Witnesses were examined and thereafter the
Philippines. As found by the Court of First Instance, upon the date of the execution document was declared to be legal and was admitted to provate.
of the will, the testator was a citizen of the State of Illinois and that the will was 49. The will gave to Victor one hundred shares of corporate stock in Johnson-
executed in conformity with the laws of that State. The certificate of naturalization Pickett Rope Company. To his father andmother in Sweden, he left 20 000
supplies incontrovertible proof that upon the date stated Johnson became a citizen pesos; to his daughter Ebba Ingeborg is 5000; to his wife, Alejandra banez,
of the United States, and inferentially also a citizen of Illionois. Although he 75 pesos per month, if she remains single. To Simeona Ibanez, a spinster, 65
remained in the Philippines for some time after receiving his discharge, no per month if she remains single. The rest is left to his five children, Mercedes,
evidence was adduced showing that at the time he returned to the United States, Encarnacion, Victor, Eleonor and Alberto.
he had then abandoned Illinois as the State of his permanent domicile, and on the 50. Note these facts: Johnson was born in Sweden and emigrate dto the US
contrary the certificate of naturalization itself recites that at that time he claimed where he lived in Chicago, Illinois for five years. At Chicago, he married
to be a resident of Illinois. It should not be forgotten that the intrinsic validity of Rosalie Ackeson and after that went to the Philippines as a soldier in the US
the provisions of this will must be determined by the law of Illinois and not, as army. He had a daughter with Ackeson anmed Ebba Ingeborg. After Johnson
Ebba apparently assumes. *INSERT DOCTRINE was discharged a soldier, he continued to live in the Philippines and later on
he was granted a divorce decree from Rosalie on the ground of desertion.
DOCTRINE: Johnson appeared in the US for a visit and procured a certificate of
In the second paragraph of article 10 of the Civil Code it is declared that "legal naturalization at Chicago. From Chicago he went to Sweden wher a
and testamentary successions, with regard to the order of succession, as well as to phorograpg was taken where he appeared with his family. Then he returned
the amount of the successional rights and to the intrinsic validity of their to Manil where he lived until his death.
provisions, shall be regulated by the laws of the nation of the person whose 51. In Manila, he married Alejandra Ibanez whom he had three children,
succession is in question, whatever may be the nature of the property and the Mercedes, Encarnacion. And Victor. The other two children mentioned were
 borne to Simeona Ibanez. this will does not assert that Johnson was not a citizen of Illinois at the date
52. After the probation of the will, Ebba entered an appearance and noted an when the will was executed. The most that is said on this point is he was
exeception to the other admitting the will to probate. Ebba moved to vacate "never a resident of the State of Illinois after the year 1898, but became and
the order and other various orders in the case. The motion was denied hence was a resident of the city of Manila," etc.
this appeal. 94. But residence in the Philippine Islands is compatible with citizenship in
53. The purpose of the appeal is to annul the decree of proabate and put the etstae Illinois; and it must be considered that the allegations of the petition on this
into intestate administration, which will make way for the establishment of point are, considered in their bearing as an attempt to refute citizenship in
the claim of Ebba as the sole legitimate heir of her father. Illinois, wholly insufficient.
54. She claims: 95. As the Court of First Instance found that the testator was a citizen of the State
a. Johnson was a resident of Manila dn not of Illinois at the time of the of Illinois and that the will was executed in conformity with the laws of that
will in question was executed State, the will was necessarily and properly admitted to probate.
b. The will is invalid and inadequate to pass real and personal property 96. The principal controversy is over the citizenship of Johnson. The evidence
in the state of Illinois adduced upon this point in the trial court consists of the certificate of
c. The order admitting the will to probate was made without notice to naturalization granted in Illinois.
Ebba 97. The certificate of naturalization supplies incontrovertible proof that upon the
d. The order in question was beyond the jurisdiction of the court date stated Johnson became a citizen of the United States, and inferentially
ISSUE/s: also a citizen of Illionois.
14. WoN the probate of Johnson’s will can be set aside on the ground that 98. In the testimony submitted to the trial court it appears that, when Johnson
johnson was not a resident of Illinois and that the will was not in conformity first came to the United States as a boy, he took up his abode in the State of
to the laws of Illinois – NO because the petition did not state any fact that the Illinois and there remained until he came as a soldier in the United States
Illinois law is different. Army to the Philippine Islands. Although he remained in the Philippines for
sometime after receiving his discharge, no evidence was adduced showing
RULING: It follows that the trial court committed no error in denying the relief that at the time he returned to the United States, he had then abandoned
sought. The order appealed from is accordingly affirmed with costs. So ordered. Illinois as the State of his permanent domicile, and on the contrary the
certificate of naturalization itself recites that at that time he claimed to be a
RATIO: resident of Illinois.
91. The The order of the Court of First Instance admitting the will to probate 99. There is no law in force by virtue of which any person of foreign nativity can
recites, among other things: become a naturalized citizen of the Philippine Islands; and it was, therefore,
impossible for Johnson even if he had so desired, to expatriate himself from
a. “That upon the date when the will in question was executed Emil the United States and change his political status from a citizen of the United
H. Johnson was a citizen of the United States, naturalized in the States to a citizen of the Phil. This being true, it is to be presumed that he
State of Illinois, County of Cook, and that the will in question was retained his citizenship in the State of Illinois along with his status as a
citizen of the United States. It would be novel doctrine to Americans living
executed in conformity with the dispositions of the law f the State
in the Philippine Islands to be told that by living here they lose their
of Illinois.” citizenship in the State of their naturalization or nativity.
100. Upon the other point — as to whether the will was executed in conformity
92. We consider this equivalent to a finding that upon the date of the execution with the statutes of the State of Illinois — The Court notes that it does not
of the will the testator was a citizen of the State of Illinois and that the will affirmatively appear from the transaction of the testimony adduced in the trial
was executed in conformity with the laws of that State. Upon the last point court that any witness was examined with reference to the law of Illinois on
the finding is express; and in our opinion the statement that the testator was the subject of the execution of will.
a citizen of the United States, naturalized in the State of Illinois, should be 101. The trial judge no doubt was satisfied that the will was properly executed by
taken to imply that he was a citizen of the State of Illinois, as well as of the examining section 1874 of the Revised Statutes of Illinois; and he may have
United States. assumed that he could take judicial notice of the laws of Illinois.
93. It is noteworthy that the petition by which it is sought to annul the probate of 102. If so, the court says he was mistaken. that section authorizes the courts
 here to take judicial notice, among other things, of the acts of the
legislative department of the United States.
103. These words clearly have reference to Acts of the Congress of the United
States; and we would hesitate to hold that our courts can, under this
provision, take judicial notice of the multifarious laws of the various
American States. Nor do we think that any such authority can be derived
from the broader language, used in the same action, where it is said that our
courts may take judicial notice of matters of public knowledge "similar" to
those therein enumerated.
104. The proper rule we think is to require proof of the statutes of the States
of the American Union whenever their provisions are determinative of
the issues in any action litigated in the Philippine courts.
105. Nevertheless, even supposing that the TC may have erred in taking judicial
notice of the law of Illinois on the point in question, such error is not now
available to Ebba
a. first, because the petition does not state any fact from which it
would appear that the law of Illinois is different from what the
court found, and,
b. secondly, because the assignment of error and argument for the
appellant in this court raises no question based on such
supposed error.
106. But it is insisted in the brief for the appellant that the will in question was not
properly admissible to probate because it contains provisions which cannot
be given effect consistently with the laws of the Philippine Islands; and it is
suggested that as Ebba is a legitimate heir of the testator she cannot be
deprived of the legitime to which she is entitled under the law governing
testamentary successions in these Islands.
107. Upon this point it is sufficient to say that the probate of the will does not
affect the intrinsic validity of its provisions, the decree of probate being
conclusive only as regards the due execution of the will.
108. If therefore, upon the distribution of this estate, it should appear that
any legacy given by the will or other disposition made therein is contrary
to the law applicable in such case, the will must necessarily yield upon
that point and the law must prevail.
109. Nevertheless, it should not be forgotten that the intrinsic validity of the
provisions of this will must be determined by the law of Illinois and not,
as the appellant apparently assumes, by the general provisions here applicable
in such matters; for in the second paragraph of article 10 of the Civil Code it
is declared that "legal and testamentary successions, with regard to the order
of succession, as well as to the amount of the successional rights and to the
intrinsic validity of their provisions, shall be regulated by the laws of the
nation of the person whose succession is in question, whatever may be the
nature of the property and the country where it may be situate."
 02 Miciano v Brimo (Kat) partition and the delivery of the deceased's business to Pietro Lanza
Nov. 1, 1927 | Romualdez, J. | Succession until the receipt of the depositions requested in reference to the
Turkish laws.
53. The partition in question puts into effect the provisions of Joseph G. Brimo's
PETITIONER: Testate Estate of Joseph G. Brimo, Juan Miciano, administrator
will which are not in accordance with the laws of his Turkish nationality, for
RESPONDENTS: Andre Brimo
which reason they are void as being in violation or article 10 of the Civil Code
which, among other things, provides the following:
SUMMARY: Juan Miciano, judicial administrator of the estate in question, filed
a. Nevertheless, legal and testamentary successions, in respect to the
a scheme of partition. Andre Brimo, one of the brothers of the deceased opposed
order of succession as well as to the amount of the successional
Miciano’s participation in the inheritance. Joseph Brimo is a Turkish citizen. The
rights and the intrinsic validity of their provisions, shall be regulated
last part of the second clause of the will stated that he wanted his will be disposed
by the national law of the person whose succession is in question,
of in accordance with the laws of the Philippines and if not respected, they will
whatever may be the nature of the property or the country in which
be excluded from the disposition of his properties. The issue is WoN Philippine
it may be situated.
law will be the basis on the distribution of Joseph Brimo’s estates – NO, the
54. Andre Brimo did not prove that said testamentary dispositions are not in
condition that it should follow Philippine law is void for being contrary to Article
accordance with the Turkish laws because he did not present any evidence
792 of the Civil Code, which states: “Impossible conditions and those contrary to
showing what the Turkish laws are on the matter. In the absence of evidence
law or good morals shall be considered as not imposed and shall not prejudice the
on such laws, they are presumed to be the same as those of the Philippines.
heir or legatee in any manner whatsoever, even should the testator otherwise
55. It has not been proved in these proceedings what the Turkish laws are. He,
provide.” The condition in the will is contrary to law because it expressly ignores
acknowledged it when he asked to be given an opportunity to present
the testator's national law when, according to article 10 of the civil Code above
evidence on this point and says that the court erred in not having deferred the
quoted, such national law of the testator is the one to govern his testamentary
approval of the scheme of partition until the receipt of certain testimony
dispositions. Said condition then, is considered unwritten, and the institution of
requested regarding the Turkish laws on the matter.
legatees in said will is unconditional and consequently valid and effective even
as to the herein oppositor (Andre Brimo).
ISSUE/s:
DOCTRINE: Impossible conditions and those contrary to law or good morals 12. WoN Philippine law will be the basis on the distribution of Joseph Brimo’s
shall be considered as not imposed and shall not prejudice the heir or legatee in estates – NO, the condition that it should follow Philippine law is void for
any manner whatsoever, even should the testator otherwise provide. being contrary to Article 792 of the Civil Code

RULING: Therefore, the orders appealed from are modified and it is directed that
the distribution of this estate be made in such a manner as to include the herein
FACTS: appellant Andre Brimo as one of the legatees, and the scheme of partition submitted
51. The partition of the estate left by the deceased Joseph G. Brimo (Turkish by the judicial administrator is approved in all other respects, without any
citizen) is in question in this case. pronouncement as to costs.
52. The judicial administrator of this estate filed a scheme of partition. Andre
Brimo, one of the brothers of the deceased, opposed it. The court, however, RATIO:
approved it. He alleged the following errors: 33. There is no evidence in the record that the national law of the testator Joseph
a. The approval of said scheme of partition; G. Brimo was violated in the testamentary dispositions in question which, not
b. denial of his participation in the inheritance; being contrary to our laws in force, must be complied with and executed.
c. the denial of the motion for reconsideration of the order approving 34. The refusal to give the oppositor another opportunity to prove such laws does
the partition; not constitute an error. It is discretionary with the trial court and the oppositor
d. the approval of the purchase made by the Pietro Lana of the was given ample opportunity to introduce competent evidence so there was
deceased's business and the deed of transfer of said business; and no grave abuse of discretion by the courts.
e. the declaration that the Turkish laws are impertinent to this cause, 35. With regard to the issue on the approval of the partition, which excluded
and the failure not to postpone the approval of the scheme of Brimo as a legatee, it must be taken into consideration that such
 exclusion is based on the last part of the second clause of the will, which
says:
a. Second. I like desire to state that although by law, I am a Turkish
citizen, this citizenship having been conferred upon me by
conquest and not by free choice, nor by nationality and, on the
other hand, having resided for a considerable length of time in the
Philippine Islands where I succeeded in acquiring all of the
property that I now possess, it is my wish that the distribution of
my property and everything in connection with this, my will, be
made and disposed of in accordance with the laws in force in the
Philippine islands, requesting all of my relatives to respect this
wish, otherwise, I annul and cancel beforehand whatever
disposition found in this will favorable to the person or persons
who fail to comply with this request.
36. The institution of legatees in this will is conditional, and the condition is that
the instituted legatees must respect the testator's will to distribute his
property, not in accordance with the laws of his nationality, but in accordance
with the laws of the Philippines.
37. If this condition as it is expressed were legal and valid, any legatee who fails
to comply with it, in this case Brimo (respondent), by his attitude in these
proceedings has not respected the will of the testator, as expressed, is
prevented from receiving his legacy.
38. The fact is, however, that the said condition is void, being contrary to law,
for article 792 of the civil Code provides the following:
a. Impossible conditions and those contrary to law or good morals shall
be considered as not imposed and shall not prejudice the heir or
legatee in any manner whatsoever, even should the testator
otherwise provide.
39. And said condition is contrary to law because it expressly ignores the
testator's national law when, according to article 10 of the civil Code
above quoted, such national law of the testator is the one to govern his
testamentary dispositions.
40. Said condition then, in the light of the legal provisions above cited, is
considered unwritten, and the institution of legatees in said will is
unconditional and consequently valid and effective even as to the herein
oppositor.
41. It results from all this that the second clause of the will regarding the law
which shall govern it, and to the condition imposed upon the legatees, is null
and void, being contrary to law.
42. All of the remaining clauses of said will with all their dispositions and
requests are perfectly valid and effective it not appearing that said clauses are
contrary to the testator's national law.
 003 VARELA vs. CALDERON (LAGUILLES) opposition on the ground that it was out of respect for the testator’s wishes
October 8, 1932 | Imperial, J. | Succession because the will was executed in his own handrwriting.
7. The grounds of the opposition are as follows:
a. That the will sought to be probated was not holographic in character
PETITIONER: Francisco Carmelo Varela
and did not comply with the requisites in the French Civil Code;
RESPONDENTS: Miguel Varela Calderon, et al
b. That the witnesses to the will did not possess the qualifications
required by the French Civil Code;
SUMMARY: The deceased Francisco is a resident of the Philippines but he made
c. That for not having complied with the requisites, said will is null
a holographic will in France and died in Switzerland. The holographic will
and void;
included an attestation clause on the bottom part, and in making the will, he was
d. That neither has it the character of an open will;
assisted by attorneys F. de Roussy de Sales, Gething C. Miller, and Henri Gadd.
e. That the provisions of the French Civil Code relative to the
Francisco Carmelo Varela filed a petition in Manila to admit said will to probate.
recording of wills were not complied with in connection with the
However, the deceased’s siblings opposed on the ground that the will was not
will in question.
holographic in character. They claim that the trial court erred in declaring the will
8. The appellants (oppositor siblings) claim that the trial court erred in declaring
a valid holographic will. The issue in this case is WoN the will is valid.
that the will was a valid holographic will made in accordance with the laws
of France; and that the trial court erred in allowing and admitting to probate
The Court held in the affirmative because under French Law, the inclusion of an
said will.
attestation clause in a holographic will does not invalidate the same. The original
will in this case was executed in French, and had been written, dated, and signed
ISSUE/s:
by Francisco with his own hand, except for the attestation clause. However, the
24. WoN the will is valid – YES because under French Law, the inclusion of an
Court based its opinion on the established fact that the depositions made by
attestation clause in a holographic will does not invalidate the same.
attorneys de Sales, Miller, and Gadd, who emphatically declared that the will in
question did not lose its holographic character by the addition of the attestation
RULING: The order appealed from is affirmed in totot.
clause, and that it may be allowed to probate in conformity with the French laws,
under which it had been made and executed. Since the will is valid in France, then
RATIO:
it follows that it may be admitted to probate in the Philippines.
1. The original will was executed in French and had been written, dated, and
signed by the testator with his own hand, with the exception of the attestation
DOCTRINE: Since the lawyers who assisted the testator in making the
clause which appears at the bottom of the document. This fact is proved by
holographic will established in their depositions that the addition of an attestation
the testimony of Francisco Varela and his other witnesses, incuding the
clause did not invalidate the will, then the Court relied on this to say that the will
depositions and is admitted by the appellants (oppositor siblings).
is valid and thus may be probated here in the Philippines.
2. The petition for the allowance and probate of said will is based on the
provisions of Art. 970 of the French Civil Code which considers as a
FACTS: holographic will that which is made or executed, dated, and signed by the
5. The deceased, Francisco Varela Calderon, a physician by profession, was a testator in his own handwriting without the necessity of any other formality,
Filipino citizen and resident of the City of Manila where he owned real and on Sec. 635 of the Code of Civil Procedure of the Philippines, which
properties. He traveled abroad for his health and temporarily resided in provides that a will made out of the Philippine Islands in accordance with the
France. Not feeling well, but in the enjoyment of his mental faculties, he laws in force in the country in which it was made and which may be allowed
decided to make his last will and testament in Paris, with the assistance of and admitted to probate therein, may also be proved, allowed, and recorded
attorneys F. de Roussy de Sales, Gething C. Miller, and Henri Gadd. He died in the Philippines in the same manner and with the same effect as if executed
in 1930, in the Grand Hotel de Lysin Sanatorium in Switzerland. in the latter country.
6. Petitioner-appellee Francisco Carmelo Varela, filed a petition in CFI Manila, 3. It is an admitted fact that the will was written, dated, and signed by the
praying that said will be admitted to probate. This was opposed by deceased’s testator, for which reason, there is no doubt that it had been made and
brother, Jose Miguel, Angel, Jesus, Trinidad, Paula, Pilar and Maria, executed in accordance with Art. 970 of the French Civil Code, were it not
surnamed Varela Calderon, although later on, Jose Miguel withdrew his for the attestation clause.
4. The oppositor siblings contend that the addition of the attestation clause has
entirely vitiated the will, because it ceased to be a holographic will, neither
does it possess the requisites of a public or open will in accordance with the
French Law.
5. The court which originally took cognizance of the case decided that such
circumstance does not invalidate the will. The Court agrees and hold that a
clause drawn up in such manner is superfluous and does not affect in any way
the essential requisites prescribed for holographic wills.
6. The Court bases its opinion not only on the clear and conclusive provisions
of the French Civil Code, and on the decisions of the French Court of
Appeals, but principally on the fact established in the depositions made by
attorneys de Sales, Miller, and Gadd, who emphatically declared that the will
in question did not lose its holographic character by the addition of the
attestation clause, and that it may be allowed to probate in conformity with
the French laws, under which it had been made and executed.
 004 GIBBS v. GOVERNMENT (Marcos) of the Philippine Islands, she was vested of a title equal to that of her husband. It
Dec. 23, 1933 | Butte, J. | Succession of Property results that the wife of the Allison was, by the law of the Philippine Islands,
vested of a descendible interest, equal to that of her husband, in the
PETITIONER: Allison D. Gibbs Philippine lands. The descendible interest of Eva Johnson Gibbs in the lands
RESPONDENTS: The Government of the Philippine Islands (oppositor- aforesaid was transmitted to her heirs by virtue of inheritance.
appellant) and The Register of Deeds of the City of Manila (respondent-appellant)
DOCTRINE: The second paragraph of article 10 can be invoked only when the
SUMMARY: The parcels of land in the case formerly belonged to the conjugal deceased was vested with a descendible interest in property within the jurisdiction
partnership of Allison D. Gibbs and Eva Johnson Gibbs. Eva died intestate. At of the Philippine Islands.
the time of her death, she and her husband were citizens of the State of California
and domiciled therein. Allison was appointed as administrator of the estate of his
wife in the intestate proceedings that he filed ex parte in the CFI of Manila. In FACTS:
that petition for intestate he alleged that the parcels of land hereunder described 1. The parcels of land in the case formerly belonged to the conjugal partnership
belong to the conjugal partnership of Allison and his wife, Eva Johnson Gibbs of Allison D. Gibbs and Eva Johnson Gibbs.
and that in accordance with the law of California, the community property of 2. Eva died intestate in Palo Alto, California on Nov. 28, 1929.
spouses who are citizens of California, upon the death of the wife previous to that 3. At the time of her death, she and her husband were citizens of the State of
of the husband, belongs absolutely to the surviving husband without California and domiciled therein.
administration. The lower court granted said petition and entered a decree 4. Allison was appointed as administrator of the estate of his wife in the intestate
adjudicating that Allison be the sole and absolute owner of said lands, applying proceedings that he filed ex parte in the CFI of Manila.
the Civil Code of California. Gibbs presented this decree to the register of deeds 5. In that petition for intestate he alleged the following:
of Manila, and demanded that the latter issue a transfer certificate of title. It - that the parcels of land hereunder described belong to the conjugal
refused to register the transfer of title of the said conjugal property to Allison D. partnership of Allison and his wife, Eva Johnson Gibbs", describing in
Gibbs, on the ground that the corresponding inheritance tax had not been paid. detail the three tracts here involved;
Allison D. Gibbs filed in the said court a petition for an order requiring the said - further alleging that his said wife, a citizen and resident of California,
register of deeds "to issue the corresponding titles" to the him without requiring died on November 28, 1929;
previous payment of any inheritance tax because he is contending he acquired it - that in accordance with the law of California, the community
not by succession (PH law), but by virtue or fact of Eva’s death (California law). property of spouses who are citizens of California, upon the death of
WoN Allison acquired the land by succession (PH law) or by virtue of the fact of the wife previous to that of the husband, belongs absolutely to the
death (California law) – Succession because Californian law only presupposes surviving husband without administration;
the situation wherein the wife only had inchoate interest over the property. In the - that the conjugal partnership of Allison D. Gibbs and Eva Johnson Gibbs,
case at bar, she was vested with a descendible interest in property therefore she deceased, has no obligations or debts and no one will be prejudiced by
and her husband equally own the property. Allison’s chief argument and the sole adjudicating said parcels of land (and seventeen others not here
basis of the lower court's decision rests upon the second paragraph of article 10 involved) to be the absolute property of the said Allison D. Gibbs as sole
of the Civil Code. The trial court found that under the law of California, upon the owner.
death of the wife, the entire community property without administration belongs 6. The lower court granted said petition and entered a decree adjudicating that
to the surviving husband; that he is the absolute owner of all the community Allison be the sole and absolute owner of said lands, applying section 1401
property from the moment of the death of his wife, not by virtue of succession of the Civil Code of California.
or by virtue of her death, but by virtue of the fact that when the death of the 7. Gibbs presented this decree to the register of deeds of Manila, and demanded
wife precedes that of the husband he acquires the community property, not that the latter issue a transfer certificate of title.
as an heir or as the beneficiary of his deceased wife, but because she never 8. Acting upon the authority of section 1547 of Article XI of Chapter 40 of the
had more than an inchoate interest or expectancy which is extinguished upon
her death. The Philippine lands here in question were acquired as community
property of the conjugal partnership of the appellee and his wife. Under the law
 Administrative Code75, the register of deeds of the City of Manila, declined RATIO:
to accept as binding said decree of court of September 22, 1930, and refused 43. Allison contends that the law of California should determine the nature and
to register the transfer of title of the said conjugal property to Allison D. extend of the title, if any, that vested in Eva Johnson Gibbs under the three
Gibbs, on the ground that the corresponding inheritance tax had not been parcels of land citing article 9 of the Civil Code76. But that, even if the nature
paid. and extent of her title under said certificates be governed by the law of the
9. Allison D. Gibbs filed in the said court a petition for an order requiring the Philippine Islands, the laws of California govern the succession to such title,
said register of deeds "to issue the corresponding titles" to the him without citing the second paragraph of article 10 of the Civil Code.
requiring previous payment of any inheritance tax. 44. The Organic Act of the Philippine Islands (known as the "Jones Law") as
10. After due hearing of the parties, the court reaffirmed said order by the regards the determination of private rights, grants practical autonomy to the
Register of Deeds (which was to pay inheritance tax) and entered the order Government of the Philippine Islands. This Government, therefore, may
which is under review. apply the principles and rules of private international law (conflict of laws)
11. The SC remanded the case to the court of origin for new trial upon additional on the same footing as an organized territory or state of the United States.
evidence in regard to the pertinent law of California in force at the time of 45. It should, therefore, resort to the law of California, the nationality and
the death of Mrs. Gibbs, also authorizing the introduction of evidence with domicile of Mrs. Gibbs, to ascertain the norm which would be applied here
reference to the dates of the acquisition of the property involved in this suit as law were there any question as to her status.
and with reference to the California law in force at the time of such 46. Allison’s chief argument and the sole basis of the lower court's decision rests
acquisition. upon the second paragraph of article 10 of the Civil Code which is as follows:
12. These are the additional facts as established by the evidence or the admissions "Nevertheless, legal and testamentary successions, in respect to the
of the parties: Allison D. Gibbs has been continuously, since the year 1902, order of succession as well as to the amount of the successional
a citizen of the State of California and domiciled therein; that he and Eva rights and the intrinsic validity of their provisions, shall be regulated
Johnson Gibbs were married at Columbus, Ohio, in July, 1906; that there was by the national law of the person whose succession is in question,
no antenuptial marriage contract between the parties; that during the whatever may be the nature of the property or the country in which
existence of said marriage, the spouses acquired 3 parcels of land in the it may be situated."
Philippines. 47. Having regard to the practical autonomy of the Philippine Islands, as above
stated, we have concluded that if article 10 is applicable and the estate in
ISSUE/s: WoN Allison acquired the land by succession (PH law) or by virtue of the question is that of a deceased American citizen, the succession shall be
fact of death (California law) – Succession because Californian law only presupposes regulated in accordance with the norms of the State of his domicile in the
the situation wherein the wife only had inchoate interest over the property. In the case United States.
at bar, she was vested with a descendible interest in property therefore she and her 48. The trial court found that under the law of California, upon the death of the
husband equally own the property. wife, the entire community property without administration belongs to the
surviving husband; that he is the absolute owner of all the community
RULING: The judgment of the court below of March 10, 1931, is reversed with property from the moment of the death of his wife, not by virtue of
directions to dismiss the petition, without special pronouncement as to the costs.. succession or by virtue of her death, but by virtue of the fact that when
the death of the wife precedes that of the husband he acquires the

75
"Registers of deeds shall not register in the registry of property any document transferring real incapacitates a married woman from acquiring or holding land in a foreign jurisdiction in
property or real rights therein or any chattel mortgage, by way of gifts mortis causa, legacy or accordance with the lex rei sitæ. There is not the slightest doubt that a California married woman
inheritance, unless the payment of the tax xed in this article and actually due thereon shall be can acquire title to land in a common law jurisdiction like the State of Illinois or the District of
shown. And they shall immediately notify the Collector of Internal Revenue or the corresponding Columbia, subject to the common-law estate by the courtesy which would vest in her husband.
provincial treasurer of the nonpayment of the tax discovered by them..." Nor is there any doubt that if a California husband acquired land in such a jurisdiction his wife
would be vested with the common law right of dower, the prerequisite conditions obtaining.
76
The laws relating to family rights and duties, or to the status, condition, and legal capacity of Article 9 of the Civil Code treats of purely personal relations and status and capacity for juristic
persons, are binding upon Spaniards even though they reside in a foreign country." It is argued acts, the rules relating to property, both personal and real, being governed by article 10 of the
that the conjugal right of the California wife in community real estate in the Philippine Islands is Civil Code. Furthermore, article 9, by its very terms, is applicable only to "Spaniards" (now, by
a personal right and must, therefore, be settled by the law governing her personal status, that is, construction, to citizens of the Philippine Islands).
the law of California. But our attention has not been called to any law of California that
 community property, not as an heir or as the beneficiary of his deceased
wife, but because she never had more than an inchoate interest or
expectancy which is extinguished upon her death.
49. The argument of the appellee apparently leads to this dilemma: If he takes
nothing by succession from his deceased wife, how can the second paragraph
of article 10 be invoked?
50. It seems clear that the second paragraph of article 10 applies only when a
legal or testamentary succession has taken place in the Philippines in
accordance with the law of the Philippine Islands; and the foreign law is
consulted only in regard to the order of succession or the extent of the
successional rights; in other words, the second paragraph of article 10 can
be invoked only when the deceased was vested with a descendible interest
in property within the jurisdiction of the Philippine Islands.
51. The nature and extent of the title which vested in Mrs. Gibbs (the wife) at the
time of the acquisition of the community lands here in question must be
determined in accordance with the lex rei sitæ.
52. The Philippine lands here in question were acquired as community property
of the conjugal partnership of the appellee and his wife. Under the law of the
Philippine Islands, she was vested of a title equal to that of her husband.
53. It results that the wife of the Allison was, by the law of the Philippine
Islands, vested of a descendible interest, equal to that of her husband, in
the Philippine lands.
54. The descendible interest of Eva Johnson Gibbs in the lands aforesaid was
transmitted to her heirs by virtue of inheritance and this transmission plainly
falls within the language of section 1536 of Article XI of Chapter 40 of the
Administrative Code which levies a tax on inheritances.
55. Article XI of Chapter 40 of the Administrative Code entitled "Tax on
inheritances, legacies, and other acquisitions mortis causa" provides in
section 1536 that "Every transmission by virtue of inheritance . . . of real
property . . . shall be subject to the following tax."
56. It is unnecessary in this proceeding to determine the "order of succession" or
the "extent of the successional rights" (article 10, Civil Code, supra) which
would be regulated by section 1386 of the Civil Code of California which
was in effect at the time of the death of Mrs. Gibbs.
57. The record does not show what the proper amount of the inheritance tax in
this case would be Deeds in any way challenged the power of the Government
to levy an inheritance tax or the validity of the statute under which the register
of deeds refused to issue a certificate of transfer reciting that the appellee is
the exclusive owner of the Philippine lands included in the three certificates
of title here involved.
 005 PHIL TRUST v BOHANAN (ARMAND) during the hearing of the case. The other appellants, children of the testator, do not
January 30, 1960 | Labrador, J. | Personal Law, Nationality and Domicile dispute the above-quoted provision of the laws of the State of Nevada. Under all the
PETITIONER: TESTATE ESTATE OF C. O. BOHANAN, deceased. PHILIPPINE above circumstances, we are constrained to hold that the pertinent law of Nevada,
TRUST CO., especially Section 9905 of the Compiled Nevada Laws of 1925, can be taken judicial
RESPONDENTS: MAGDALENA C. BOHANAN, EDWARD C. BOHANAN, and notice of by us, without proof of such law having been offered at the hearing of the
MARY LYDIA BOHANAN project of partition.
SUMMARY: Notwithstanding the long residence of the testator, C.O. Bohanan, in DOCTRINE: The validity of testamentary dispositions are to be governed by the
the Philippines, he continued and remained to be a citizen of the United States and of national law of the testator, provided that the law must be proved incourts.
the state of his pertinent residence to spend the rest of his days in that state. His FACTS:
permanent residence or domicile in the United States depended upon his personal 46. On April 24, 195 0, the Court of First Instance of Manila, Hon. Rafael
intent or desire, and he selected Nevada as his domicile and therefore at the time of Amparo, presiding, admitted to probate a last will and testament of C. O.
his death, he was a citizen of that state. C. O. Bohanan was at the time of his death a Bohanan, executed by him on April 23, 1944 in Manila. In the said order, the
citizen of the US and of the State of Nevada and declared that his will and testament court made the following findings:
is fully in accordance with the laws of the state of Nevada and admits the same to According to the evidence of the opponents the testator was born in Nebraska and therefore a citizen of
probate. Accordingly, the Philippine Trust Company, named as the executor of the that state, or at least a citizen of California where some of his properties are located. This contention in
will, was appointed to such executor and upon the filing of a bond in the sum of untenable. Notwithstanding the long residence of the decedent in the Philippines, his stay here was merely
temporary, and he continued and remained to be a citizen of the United States and of the state of his
P10,000.00.The executor filed a project of partition making, in accordance with the pertinent residence to spend the rest of his days in that state. His permanent residence or domicile in the
provisions of the will, the following adjudications: (1) one-half of the residuary United States depended upon his personal intent or desire, and he selected Nevada as his homicide and
estate, to the Farmers and Merchants National Bank of Los Angeles, in trust only for therefore at the time of his death, he was a citizen of that state. Nobody can choose his domicile or
the benefit of testator's grandson which consists of several mining companies; (2) the permanent residence for him. That is his exclusive personal right.
Wherefore, the court finds that the testator C. O. Bohanan was at the time of his death a citizen of the
other half of the residuary estate to the testator's brother and his sister (3) legacies of United States and of the State of Nevada and declares that his will and testament, Exhibit A, is fully in
P6,000 each to his (testator) son and his daughter to be paid in three yearly accordance with the laws of the state of Nevada and admits the same to probate. Accordingly, the
installments; (4) legacies to other persons. Out of the total estate of P211,639.33 in Philippine Trust Company, named as the executor of the will, is hereby appointed to such executor and
cash, the testator gave his grandson P90,819.67 and one-half of all shares of stock of upon the filing of a bond in the sum of P10,000.00, let letters testamentary be issued and after taking the
prescribed oath, it may enter upon the execution and performance of its trust.
several mining companies and to his brother and sister the same amount. To his
47. It does not appear that the order granting probate was ever questions on
children he gave a legacy of only P6,000 each, or a total of P12,000. WoN
appeal. The executor filed a project of partition dated January 24, 1956,
Magdalena is entitled to legitime as a surviving spouse – NO. There is no right to
making, in accordance with the provisions of the will, the following
share in the inheritance in favor of a divorced wife inthe State of Nevada. There is
adjudications: (1) one-half of the residuary estate, to the Farmers and
also no conjugal property between her and decedent. Moreover, during the
Merchants National Bank of Los Angeles, California, U.S.A. in trust only for
proceedings of the case, Magdalena filed amotion to withdraw P20,000 from the
the benefit of testator's grandson Edward George Bohanan, which consists of
estate funds, chargeable against hershare in the conjugal property. But the Court
several mining companies; (2) the other half of the residuary estate to the
found that there is no community property. WoN the children are entitled to their
testator's brother, F.L. Bohanan, and his sister, Mrs. M. B. Galbraith, share
legitime – NO. The CFI has correctly held that the law to be applied is Nevada law
and share alike. This consist in the same amount of cash and of shares of
because the decedent was a US Citizen. The old Civil Code, which is applicable to
mining stock similar to those given to testator's grandson; (3) legacies of
this case because the testator died in 1944, expressly provides that successional rights
P6,000 each to his (testator) son, Edward Gilbert Bohana, and his daughter,
to personal property are to be earned by the national law of the person whose
Mary Lydia Bohanan, to be paid in three yearly installments; (4) legacies to
succession is in question. The testator was a citizen of the State of Nevada because he
Clara Daen, in the amount of P10,000.00; Katherine Woodward, P2,000;
had selected this as his domicile and his permanent residence. It does not appear that
Beulah Fox, P4,000; and Elizabeth Hastings, P2,000;
at time of the hearing of the project of partition, the above-quoted provision was
48. It will be seen from the above that out of the total estate (after deducting
introduced in evidence. During the hearing of the motion of Magdalena C. Bohanan
administration expenses) of P211,639.33 in cash, the testator gave his
for withdrawal of P20,000 as her share, the foreign law, especially Section 9905,
grandson P90,819.67 and one-half of all shares of stock of several mining
Compiled Nevada Laws was introduced in evidence by appellant's (herein) counsel.
companies and to his brother and sister the same amount. To his children he
Again said laws presented by the counsel for the executor and admitted by the Court
gave a legacy of only P6,000 each, or a total of P12,000.
 49. The wife Magadalena C. Bohanan and her two children question the validity conjugal property, (See pp. 294-297, Vol. I, Record, Court of First Instance),
of the testamentary provisions disposing of the estate in the manner above and the court in its said error found that there exists no community property
indicated, claiming that they have been deprived of the legitimate that the owned by the decedent and his former wife at the time the decree of divorce
laws of the form concede to them. was issued. As already and Magdalena C. Bohanan may no longer question
the fact contained therein, i.e. that there was no community property acquired
ISSUE/s: by the testator and Magdalena C. Bohanan during their converture.
1. WoN Magdalena is entitled to legitime as a surviving spouse – NO. There is no 71. Moreover, the court below had found that the testator and Magdalena C.
right to share in the inheritance in favor of a divorced wife inthe State of Nevada. Bohanan were married on January 30, 1909, and that divorce was granted to
There is also no conjugal property between her and decedent. Moreover, during the him on May 20, 1922; that sometime in 1925, Magdalena C. Bohanan
proceedings of the case, Magdalena filed amotion to withdraw P20,000 from the married Carl Aaron and this marriage was subsisting at the time of the death
estate funds, chargeable against hershare in the conjugal property. But the Court of the testator. Since no right to share in the inheritance in favor of a divorced
found that there is no community property. wife exists in the State of Nevada and since the court below had already found
2. WoN the children are entitled to their legitime – NO. The CFI has correctly that there was no conjugal property between the testator and Magdalena C.
held that the law to be applied is Nevada law because the decedent was a US Citizen. Bohanan, the latter can now have no longer claim to pay portion of the estate
left by the testator.
RULING: As in accordance with Article 10 of the old Civil Code, the validity of 72. As regards the claim of the testator’s children, The old Civil Code, which is
testamentary dispositions are to be governed by the national law of the testator, and applicable to this case because the testator died in 1944, expressly provides
as it has been decided and it is not disputed that the national law of the testator is that that successional rights to personal property are to be earned by the national
of the State of Nevada, already indicated above, which allows a testator to dispose of law of the person whose succession is in question. The pertinent provision
all his property according to his will, as in the case at bar, the order of the court provides: “Nevertheless, legal and testamentary successions, in respect to the
approving the project of partition made in accordance with the testamentary order of succession as well as to the extent of the successional rights and the
provisions, must be, as it is hereby affirmed, with costs against appellants. intrinsic validity of their provisions, shall be regulated by the national law of
the person whose succession is in question, whatever may be the nature of
RATIO: the property and the country in which it is found.”
69. The first question refers to the share that the wife of the testator, Magdalena 73. In the proceedings for the probate of the will, it was found out and it was
C. Bohanan, should be entitled to received. The will has not given her any decided that the testator was a citizen of the State of Nevada because he had
share in the estate left by the testator. It is argued that it was error for the trial selected this as his domicile and his permanent residence.. So the question at
court to have recognized the Reno divorce secured by the testator from his issue is whether the estementary dispositions, especially hose for the children
Filipino wife Magdalena C. Bohanan, and that said divorce should be which are short of the legitime given them by the Civil Code of the
declared a nullity in this jurisdiction, citing the case of Querubin vs. Philippines, are valid. It is not disputed that the laws of Nevada allow a
Querubin. The court below refused to recognize the claim of the widow on testator to dispose of all his properties by will (Sec. 9905, Complied Nevada
the ground that the laws of Nevada, of which the deceased was a citizen, Laws of 1925, supra). It does not appear that at time of the hearing of the
allow him to dispose of all of his properties without requiring him to leave project of partition, the above-quoted provision was introduced in evidence,
any portion of his estate to his wife. Section 9905 of Nevada Compiled Laws as it was the executor's duly to do. The law of Nevada, being a foreign law
of 1925 provides: can only be proved in our courts in the form and manner provided for by our
Every person over the age of eighteen years, of sound mind, may, by last will, dispose of all his or Rules, which are as follows:
her estate, real and personal, the same being chargeable with the payment of the testator's debts. SEC. 41. Proof of public or official record. — An official record or an entry therein, when admissible for
70. Besides, the right of the former wife of the testator, Magdalena C. Bohanan, any purpose, may be evidenced by an official publication thereof or by a copy tested by the officer having
to a share in the testator's estafa had already been passed upon adversely the legal custody of he record, or by his deputy, and accompanied, if the record is not kept in the
Philippines, with a certificate that such officer has the custody. . . . (Rule 123).
against her in an order dated June 19, 1955, (pp. 155-159, Vol II Records,
Court of First Instance), which had become final, as Magdalena C. Bohanan 74. We have, however, consulted the records of the case in the court below and
does not appear to have appealed therefrom to question its validity. On we have found that during the hearing on October 4, 1954 of the motion of
December 16, 1953, the said former wife filed a motion to withdraw the sum Magdalena C. Bohanan for withdrawal of P20,000 as her share, the foreign
of P20,000 from the funds of the estate, chargeable against her share in the law, especially Section 9905, Compiled Nevada Laws. was introduced in
evidence by appellant's counsel as Exhibits "2" (See pp. 77-79, VOL. II, and
 t.s.n. pp. 24-44, Records, Court of First Instance). Again said laws presented
by the counsel for the executor and admitted by the Court as Exhibit "B"
during the hearing of the case on January 23, 1950 before Judge Rafael
Amparo.
75. In addition, the other appellants, children of the testator, do not dispute the
above-quoted provision of the laws of the State of Nevada. Under all the
above circumstances, we are constrained to hold that the pertinent law of
Nevada, especially Section 9905 of the Compiled Nevada Laws of 1925, can
be taken judicial notice of by us, without proof of such law having been
offered at the hearing of the project of partition.
006 AZNAR v. CHRISTENSEN-GARCIA (SIAPNO edited by MERILLES)
January 31, 1963 | Labrador, J. | Succession FACTS:
8. Edward Christensen, born in New York, migrated to California where he
PETITIONER: IN THE MATTER OF THE TESTATE ESTATE OF resided and consequently was considered citizen thereof. He came to the
EDWARD E. CHRISTENSEN, DECEASED. ADOLFO C. AZNAR, Executor Philippines where he became a domiciliary until the time of his death.
and LUCY CHRISTENSEN, Heir of the deceased However, during the entire period of his residence in this country, he had
RESPONDENTS: HELEN CHRISTENSEN GARCIA always considered himself a citizen of California.
9. In his will, Edward instituted his daughter Maria Lucy Christensen as his
SUMMARY: Edward Christensen was born in New York but he migrated to only heir, but left a legacy of P3600 in favor of Helen Christensen Garcia
California where he resided for a period of 9 years. He came to the Philippines who, in his will was described as "not in any way related to" him.
where he became a domiciliary until his death. In his will, he declared to have 10. It is in accordance with the above-quoted provisions that the executor in his
only one child (natural daughter) Maria Lucy Christensen as his only heir. final account and project of partition ratified the payment of only P3,600 to
However, he left a sum of money in favor of Helen Christensen Garcia, an Helen Christensen Garcia and proposed that the residue of the estate be
acknowledged natural child, though not in any way related to the deceased. Helen transferred to his daughter, Maria Lucy Christensen.
claims that under Article 16 of the Civil Code, California law should be applied. 11. But in a separate decision, the Supreme Court declared Helen as an
However, Article 946 of the Civil Code of California states that “If there is no acknowledged natural daughter of Edward. Thus, Helen alleged The legal
law to the contrary, in the place where personal property is situated, it is deemed grounds of opposition are (a) that the distribution should be governed by the
to follow the person of its owner, and is governed by the law of his domicile.” laws of the Philippines, and (b) that said order of distribution is contrary
thereto insofar as it denies to Helen Christensen, one of two acknowledged
ISSUE: Whether or not the national law of the deceased should be applied in natural children, one-half of the estate in full ownership.
determining the successional rights of his heirs - Yes. Article 16 of the Civil Code 12. She claims that under Art. 16 of the Civil Code, the California law should be
states that successional rights are determined by the national law of the country applied, and the question of the validity of the testamentary provision should
where the deceased is a citizen hence the internal law of California. Said internal thus be referred back to the law of the decedent’s domicile, which is the
law distinguishes the rule to be applied to Californians domiciled in California Philippines.
and for Californians domiciled outside of California. 13. She invokes the provisions of Article 946 of the Civil Code of California,
which is as follows: “If there is no law to the contrary, in the place where
For Californians residing in other jurisdiction, the law of the domiciliary country personal property is situated, it is deemed to follow the person of its owner,
must apply. Edward Christensen being domiciled in the Philippines, the law of and is governed by the law of his domicile.” Accordingly, her share must be
his domicile must be followed. The case was remanded to the lower court for increased in view of successional rights of illegitimate children under
further proceedings – the determination of the successional rights under
Philippine laws.
Philippine law only. The conflicts of law rule in CA (Art. 946) authorize the
14. On the other hand, the executor and Lucy argue that the national law of the
return of question of law to the testator’s domicile. The court must apply its own
deceased must apply, and thus the courts must apply internal law of
rule in the Philippines as directed in the conflicts of law rule in CA, otherwise the
case/issue will not be resolved if the issue is referred back and forth between 2 California on the matter. Under California law, there are no compulsory heirs
states. and consequently a testator may dispose of his property by will in the form
and manner he desires (Kaufman)
DOCTRINE: However, intestate and testamentary successions, both with
respect to the order of succession and to the amount of successional rights and to ISSUE/s: W/N Philippine law should ultimately be applied? YES, PH law should
apply because the California law allows it for Californians with domicile outside the
the intrinsic validity of testamentary provisions, shall be regulated by the national
State
law of the person whose succession is under consideration, whatever may be
the nature of the property and regardless of the country where said property may
be found. RULING: WHEREFORE, the decision appealed from is hereby reversed and the case
returned to the lower court with instructions that the partition be made as the Philippine
law on succession provides. Judgment reversed, with costs against appellees
RATIO: the rule applied in Kaufman, is its internal law. If the law on succession
Edward was a US Citizen but is a domicile in the Philippines at the time of his death and the conflict of laws rules of California are to be enforced jointly, each in
12. In arriving at the conclusion that the domicile of the deceased is the its own intended and appropriate sphere, the principle cited in Kaufman
Philippines, SC was persuaded by the fact that he was born in New York, should apply to citizens living in the State, but Article 946 should apply
migrated to California and resided there for nine years, and since he came to to such of its citizens as are not domiciled in California but in other
the Philippines in 1913 he returned to California very rarely and only for short jurisdictions.
visits (perhaps to relatives), and considering that he appears never to have 19. The national law mentioned in Article 16 of our Civil Code is the law on
owned or acquired a home or properties in that state, which would indicate conflict of laws in the California Civil Code, i.e., Article 946, which
that he would ultimately abandon the Philippines and make home in the State authorizes the reference or return of the question to the law of the
of California.
testator's domicile. The conflict of laws rule in California, Article 946, Civil
13. Residence is a term used with many shades of meaning from mere temporary
Code, precisely refers back the case, when a decedent is not domiciled in
presence to the most permanent abode. Generally, however, it is used to
California, to the law of his domicile, which is the Philippines in the case
denote something more than mere physical presence. (Sec. 16, Goodrich on
Conflict of Laws) at bar.
14. As to his citizenship, however, SC found that the citizenship that he acquired 20. The Philippine court therefore must apply its own law as directed in the
in California when he resided in Sacramento, California from 1904 to 1913, conflict of laws rule of the state of the decedent.
was never lost by his stay in the Philippines, for the latter was a territory of 21. RENVOI DOCTRINE:
the United States (not a state) until 1946 and the deceased appears to have a. Assume (1) that this question arises in a Massachusetts court. There the rule
considered himself as a citizen of California by the fact that when he executed of the conflict of laws as to intestate succession to movables calls for an
his will in 1951 he declared that he was a citizen of that State; so that he application of the law of the deceased's last domicile. Since by hypothesis X's
appears never to have intended to abandon his California citizenship by last domicile was France, the natural thing for the Massachusetts court to do
acquiring another. would be to turn to French statute of distributions, or whatever corresponds
thereto in French law, and decree a distribution accordingly. An examination
Philippine law governs of French law, however, would show that if a French court were called upon
15. The law that governs the validity of his testamentary dispositions is defined to determine how this property should be distributed, it would refer the
in Article 16 of the Civil Code of the Philippines, which is as follows: distribution to the national law of the deceased, thus applying the
ART. 16. Real property as well as personal property is subject to the law of Massachusetts statute of distributions. So on the surface of things the
the country where it is situated. Massachusetts court has open to it alternative course of action: (a) either to
16. There is no single American law governing the validity of testamentary apply the French law is to intestate succession, or (b) to resolve itself into a
provisions in the United States, each state of the Union having its own private French court and apply the Massachusetts statute of distributions, on the
law applicable to its citizens only and in force only within the state. The assumption that this is what a French court would do. If it accepts the so-
“national law” indicated in Article 16 of the Civil Code above quoted can not, called renvoi doctrine, it will follow the latter course, thus applying its own
therefore, possibly mean or apply to any general American law. So it can refer law. This is one type of renvoi. A jural matter is presented which the conflict-
to no other than the private law of the State of California. of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of
17. However, intestate and testamentary successions, both with respect to the which, in turn, refers the matter back again to the law of the forum. This is
order of succession and to the amount of successional rights and to the renvoi in the narrower sense. The German term for this judicial process is
intrinsic validity of testamentary provisions, shall be regulated by the 'Ruckverweisung.'
national law of the person whose succession is under consideration, b. Another theory, known as the "doctrine of renvoi", has been advanced. The
whatever may be the nature of the property and regardless of the country theory of the doctrine of renvoi is that the court of the forum, in determining
where said property may be found. the question before it, must take into account the whole law of the other
18. The laws of California have prescribed two sets of laws for its citizens, one jurisdiction, but also its rules as to conflict of laws, and then apply the law to
for residents therein and another for those domiciled in other jurisdictions. the actual question which the rules of the other jurisdiction prescribe. This
Article 946 of the California Civil Code is its conflict of laws rule, while may be the law of the forum.
22. The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs.
Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton
vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.)
cited by appellees to support the decision can not possibly apply in the case
at bar, for two important reasons, i.e., the subject in each case does not appear
to be a citizen of a state in the United States but with domicile in the
Philippines, and it does not appear in each case that there exists in the state
of which the subject is a citizen, a law similar to or identical with Art. 946 of
the California Civil Code.
 007 BELLIS v. BELLIS (PELIÑO) DOCTRINE: Art. 16, par. 2: intestate and testamentary successions, both with respect
June 6, 1967 | Bengzon, J.P., J. | Succession to the order of succession and to the amount of successional rights and to the intrinsic
validity of testamentary provisions, shall be regulated by the national law of the person
OPPOSITORS-APPELLANTS: Testate Estate of Amos G. Bellis, deceased, whose succession is under consideration, whatever may be the nature of the property
People’s Bank & Trust Company, executor, Maria Cristina Bellis and Miriam Palma and regardless of the country wherein said property may be found. Art. 1039: capacity
Bellis to succeed is to be governed by the national law of the decedent.
HEIRS-APPELLEES: Edward A. Bellis, et. al.
FACTS:
SUMMARY: Amos was born in Texas. His first wife was Mary, whom he divorced, 1. Direct appeal to the SC upon a question purely of law, from an order of the CFI
and he had 5 legitimate children with her. With his second wife, Violet, he had 3 of Manila dated April 30, 1964, approving the project of partition filed by the
children. Amos also had 3 illegitimate children. On August 5, 1952, Amos executed a executor in Civil Case No. 37089.
will in the PH where he directed that after taxes, obligations, and expenses, the estate 2. Amos G. Bellis (Amos) was born in Texas, was a “citizen of the State of Texas
should be divided in the following manner: $240k to Mary, P120k or P40k each for and of the US.”
his illegitimate children, and after the first 2 are satisfied, the remainder will go to the a. With his first wife, Mary E. Mallen, whom he divorced, he had 5 legitimate
surviving children, all in equal shares. On July 8, 1958, Amos died and during that children: Edward, George (pre-deceased Amos in infancy), Henry,
time he was a resident of San Antonio, Texas. His will was admitted to probate in the Alexander, and Anna Allsman.
CFI on September 15, 1958. PBTC, as executor, paid all the bequests + the shares b. With his 2nd wife, Violet Kennedy who survived him, he had 3 legitimate
indicated. On January 17, 1964, the illegitimate children (the 2 girls) filed their children: Edwin, Walter, and Dorothy.
oppositions to the project of partition, claiming that they were deprived of their c. Amos also had 3 illegitimate children: Amos Jr., Maria Cristina, and Miriam
legitimes as illegitimate children. CFI overruled the contention of the illegitimate Palma (will collectively be known as illegitimate children)
children, based on Art. 16 of the NCC. The illegitimate children filed a MR, but it was 3. On August 5, 1952, Amos executed a will in the Philippines, in which he directed
denied. Hence, this petition. The issue in this case is which law should apply, PH law that after all taxes, obligations, and expenses of administration are paid for, his
or Texas law? The SC held that Texas law should apply. The argument of the distributable estate should be divided, in trust, in the following order and manner:
illegitimate children was that Art. 17, par. 3 is the exception to Art. 16, par. 2 of the a. $240,000.00 to his 1st wife, Mary Mallen;
NCC. The SC held that the argument is without merit. ongress deleted the phrase b. P120,000.00 to his 3 illegitimate children, or P40,000.00 each.
“notwithstanding the provisions of this and the next preceding article” when they c. After the foregoing 2 items have been satisfied, the remainder shall go to his
incorporated Art. 11 of the Old Civil Code as Art. 17 of the NCC; while reproducing 7 surviving children by the 1st and 2nd wives, namely: Edward, Henry,
without substantial change the 2nd par. of Art. 10 of the Old Civil Code as Art. 16 of Alexander, Anna, Edwin, Walter, and Dorothy, all in equal shares.
the NCC. It must have been their purpose to make the 2nd par. of Art. 16, a specific 4. On July 8, 1958, Amos died, a resident of San Antonio, Texas, USA. His will
provision in itself which must be applied in testate and intestate successions. Further was admitted to probate in the CFI of Manila on September 15, 1958.
indication of this legislative intent, Congress added a new provision, under Art. 1039, 5. People’s Bank and Trust Company (PBTC) as executor of the will, paid all the
which decrees that capacity to succeed is to be governed by the national law of the bequests including the amount of $240,000 in the forms of shares of stock to
decedent. Congress has specifically chosen to leave, among other things, the amount Mary, and to the 3 illegitimate children, P40k each in satisfaction of their
of successional rights, to the decedent’s national law. Specific provisions must prevail respective legacies, or a total of P120k, which PBTC released from time to time
over general ones. The illegitimate children also argue that Amos executed 2 wills, so according as the lower court approved and allowed the various motions or
Amos intended that the PH law will govern PH estate. But SC said that based on petitions filed by the latter 3 requesting partial advances on account of their
Miciano v. Brimo: a provision in a foreigner’s will to the effect that his properties shall respective legacies.
be distributed in accordance with PH law and not with his national law is illegal and 6. On January 8, 1964, preparatory to closing its administration, PBTC submitted
void, for his national law cannot be ignored in regard to those matters that Art. 10 (now and filed its “Executor’s Final Account, Report of Administration and Project of
Art. 16 of the NCC) states said national law should govern. The parties admit that Partition” wherein it reported the satisfaction of the legacy of Mary Wallen by
Amos was a citizen of Texas, USA and that under the laws of Texas, there are no the delivery to her of shares of stock amounting to $240k and the legacies of the
forced heirs or leigitmes. Accordingly, since the intrinsic validity of the provision of illegitimate children in the amount of P40k each or a total of P120k.
the will and the amoun of successional rights are to be determined under Texas law, a. In the project of partition, PBTC, pursuant to the “Twelfth” clause of Amos’
the PH law on legitimes cannot be applied to the testacy of Amos. Last Will and Testament, divided the residuary estate into 7 equal portions
for the benefit of Amos’ 7 legitimate children by the 1st and 2nd marriages.
7. On January 17, 1964, Maria Cristina and Miriam Palma filed their respective
 oppositions to the project of partition on the ground that they were deprived of argue that their case falls under the circumstances mentioned in the 3rd par. of Art.
their legitimes as illegitimate children, and therefore, compulsory heirs of Amos. 17 of the CC in relation to Art. 16.
a. Amos Jr. interposed no opposition despite notice to him, proof of service of a. Art. 16, par. 278 and Art. 103979 of the CC render applicable the national law
which is evidenced by the registry receipt submitted on April 27, 1964 by of the decedent, in intestate or testamentary successions, with regard to 4
PBTC.77 items: (a) the order of succession; (b) amount of successional rights; (c)
8. After the parties filed their respective memoranda and pleadings, the lower court intrinsic validity of the provisions of the will; and (d) capacity to succeed.
on April 30, 1964, issued an order overruling the oppositions and approving b. The illegitimate children counter that Art. 17, par. 3 of the NCC80 prevails as
PBTC’s final account, report, and administration and project of partition. the exception to Art. 16, par. 2.
a. Relying on Art. 16 of the CC, it applied the national law of Amos, which in 3. SC says that the argument of the illegitimate children is incorrect.
this case was Texas law, which did not provide for legitimes. a. Congress deleted the phrase “notwithstanding the provisions of this and the
b. They filed a MR, but the court denied on June 11, 1964. next preceding article” when they incorporated Art. 11 of the Old Civil Code
9. Hence, this petition. as Art. 17 of the NCC; while reproducing without substantial change the 2nd
par. of Art. 10 of the Old Civil Code as Art. 16 of the NCC. It must have
ISSUE/s: been their purpose to make the 2nd par. of Art. 16, a specific provision in
15. Which law must apply--Philippine law or Texas law? - Texas law based on Art. itself which must be applied in testate and intestate successions. Further
16 of the NCC. indication of this legislative intent, Congress added a new provision, under
Art. 1039, which decrees that capacity to succeed is to be governed by
RULING: WHEREFORE, the order of the probate court is hereby AFFIRMED in toto, the national law of the decedent.
with costs against the appellant. b. It is evident that whatever public policy or good customs may be involved in
our system of legitimes, Congress has not intended to extend the same to the
RATIO: succession of foreign nationals. For it has specifically chosen to leave,
On whether among other things, the amount of successional rights, to the decedent’s
1. The SC said that the parties do not submit the case on, nor even discuss the national law. Specific provisions must prevail over general ones.
doctrine of renvoi, applied by the SC in Aznar v. Christensen. 4. Oppositors also point out that Amos executed 2 wills: 1 to govern Texas estate
a. The doctrine is usually pertinent where the decedent is a national of 1 country and the other to govern PH estate, and from this, they argue that Amos intended
and a domicile of another. that PH law govern his PH estate.
b. In this case, it is not disputed that Amos was both a national of Texas and a a. SC: Assuming that that was Amos’ intention in executing a separate PH will,
domicile at the time of his death (San Antonio, Texas was his legal it would not alter the law.
residence). b. Miciano v. Brimo: a provision in a foreigner’s will to the effect that his
c. Even assuming that Texas has a conflict of law rule providing that the properties shall be distributed in accordance with PH law and not with his
domiciliary system (law of the domicile) should govern, the same would not national law is illegal and void, for his national law cannot be ignored in
result in a reference back (renvoi) to PH law, but would still refer to Texas regard to those matters that Art. 10 (now Art. 16 of the NCC) states said
law. national law should govern.
d. Nonetheless, if Texas has a conflict of law rule adopting the situs theory (lex c. The parties admit that Amos was a citizen of Texas, USA and that under
rei sitae) calling for the application of the law of the place where the the laws of Texas, there are no forced heirs or leigitmes. Accordingly,
properties are situated, renvoi would arise since the properties here involved since the intrinsic validity of the provision of the will and the amount of
are found in the PH. In the absence of proof as to conflict of law rule of successional rights are to be determined under Texas law, the PH law
Texas, it should not be presumed different from ours. on legitimes cannot be applied to the testacy of Amos.
2. The position of the illegitimate children is not rested on the doctrine of renvoi.
As stated, they never mentioned nor invoked it in their arguments. Rather, they

77
In the footnotes, it was stated that Amos Jr. later filed a motion praying that as a legal heir, he be included in person whose succession is under consideration, whatever may be the nature of the property and regardless of the country
this case as one of the oppositors-appellants; to file or adopt the opposition of his sisters to the project of wherein said property may be found."
79
partition; to submit his brief after paying his proportionate share in the expenses incurred in the printing of the "Art. 1039. Capacity to succeed is governed by the law of the nation of the decedent."
80
record on appeal; or to allow him to adopt the briefs filed by his sisters, but the SC resolved to deny the motion. "Prohibitive laws concerning persons, their acts or property, and those which have for their object public order, public
78
"Art 16. Real property as well as personal property is subject to the law of the country where it is situated. policy and good customs shall not be rendered ineffective by laws, or judgments promulgated, or by determinations or
“However", intestate and testamentary successions, both with respect to the order of succession and to the amount of conventions agreed upon in a foreign country."
successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the
 008 BILBAO v. BILBAO (PUNSALAN) goes to the survivor, may be tempted to kill or dispose of the other.
August 2, 1950 | Montemayor, J. | Succession

PETITIONER: (In re Will of Victor Bilbao) Ramon N. Bilbao FACTS:

RESPONDENTS: Dalmacio Bilbao, Cleofas Bilbao, Eusebia Bilbao, Catalina 1. This is an appeal from a decision of the CFI Negros Oriental denying the
Bilbao, Filemon Abringe, Francisco Academia petition for admission to probate of the last will and testament of Victor
Bilbao who died July 13, 1943, which petition was filed by his widow and
SUMMARY: The last will and testament of Victor Bilbao was executed on Oct. 6,
co-testator Ramona Navarro.
1931 on a single page or sheet jointly with his wife and co-testator Ramona
2. The will was executed on October 6, 1931 on a single page or sheet by the
Navarro. Victor died in 1943 and the petition for admission to probate was thereafter
filed by Navarro. Filemon Abringe (near relative of deceased Bilbao) opposed this deceased Bilbao jointly with his wife Navarro.
petition and alleged that the will was executed by the husband and wife for their a. The 2 testators directed that “all of our respective private properties
reciprocal benefit and therefore not valid, and that it was not executed and attested both rea and personal, and all of our conjugal properties, and any
to as required by law. After hearing, the CFI found the will to have been executed other property belonging to either or both of us, be given and
conjointly by the deceased husband and wife for their reciprocal benefit, and that transmitted to anyone or either of us, who may survive the other, or
a will of that kind is neither contemplated by Act No. 190 (Code of Civil who may remain the surviving spouse of the other...”
Procedure) nor permitted by Art. 669 of the Civil Code (FOOTNOTE#1). Such 3. Such petition for admission to probate was opposed by Filemon Abringe
decision was appealed by Ramon Bilbao, who argues that the Code of Civil Procedure (near relative of Bilbao), that the alleged will was executed by the husband
provisions on wills are deemed to have impliedly repealed the provision of the and wife for their reciprocal benefit and therefore not valid, and that it
Civil Code. was not executed and attested to as required by law.
Issue: WoN the CFI erred in not finding that a joint and reciprocal will between 4. After hearing, the CFI found the will to have been executed conjointly by
husband and wife is valid under the present law (Note: old Civil Code times pa to) – the deceased husband and wife for their reciprocal benefit, and that a will
NO, the Code of Civil Procedure on wills have not completely repealed the provisions of that kind is neither contemplated by Act No. 190 (Code of Civil
of the Civil Code on the same matter. In fact, both are used in harmony as proven by Procedure) nor permitted by Art. 66981 of the Civil Code.
jurisprudence (RATIO#3) and the fact that the new Civil Code (RA 386) has 5. Appellant Ramon Bilbao argues that Chapter XXXI, secs. 614, 618 of Act
reproduced Art. 669 word for word in Art. 818. 190 appears to be a complete enactment on the subject of execution of wills
Thus the provision of the Code of Civil Procedure regarding wills have not repealed and may thus be regarded as the expression of the whole law.
all the articles of the old Civil Code on the same subject; article 669 of the Civil Code
a. It must be deemed to have impliedly repealed the provision of the
is not incompatible or inconsistent with said provision of the Code of Civil Procedure
Civil Code on the matter
and finally, said articles 669 of the Civil Code is still in force is still in force.
(PROCEED TO DOCTRINE) b. Inasmuch as the present law on wills as embodied in the Code of
Civil Procedure has been taken from American law, it should be
DOCTRINE: The provision of Art. 669 of the Civil Code prohibiting the execution interpreted in accordance with said law
of a will by two or more persons conjointly or in the same instrument either for their c. Because joint and reciprocal wills are neither regarded as
reciprocal benefit or for the benefit of a third person, is not unwise and is not against invalid nor on the contrary they are allowed, then Art. 669 of
public policy. The reason for Art. 669 is that when a will is made jointly or in the the Civil Code prohibiting execution of joint wills (whether
same instrument, the spouse who is more aggressive, stronger in will or character reciprocal or for the benefit of a third party) should be
and dominant is liable to dictate the terms of the will for his or her own benefit considered repealed and superseded by the new law.
or for that of third persons whom he or she desires to favor. And where the will
is not only joint but reciprocal, either one of the spouses who may happen to be ISSUE/s:
unscrupulous, wicked, faithless or desperate, knowing as he or she does the terms of WoN the CFI erred in not finding that a joint and reciprocal will between husband
the will whereby the whole property of the spouses both conjugal and paraphernal and wife is valid under the present law (Note: old Civil Code times pa to) – NO,

81
Art. 669: Two or more persons cannot make a will conjointly or in the same
instrument, either for their reciprocal benefit or for the benefit of a third person.
 the Code of Civil Procedure on wills have not completely repealed the provisions a will was executed in 1923 and was jointly executed by husband and wife
of the Civil Code on the same matter. In fact, both are used in harmony as proven in the same instrument, was admitted to probate by the CFI Zamboanga
by jurisprudence and the fact that the new Civil Code (RA 386) has reproduced and the decision was AFFIRMED by the SC, thereby proving that the SC
Art. 669 word for word in Art. 818. has disregarded the prohibition on the joint execution of wills.
a. Contention untenable. It is true that the will was allowed probate by
RULING: SC affirmed the CFI decision appealed from. the CFI, but there was no appeal from the order approving the
will on the ground of its invalidity, but only on the manner the
RATIO: properties involved were to be distributed or otherwise disposed
1. SC has made an extensive study of the cases decided by them covering the of.
field of wills, with reference to or ruling on Art. 669 of the Civil Code b. The SC never tackled the invalidity nor applicability of Art. 669 of
a. But SC has failed to find any case wherein that particular codal CC, but merely ruled that a testator may die both testate and
provision has been discussed or applied, declaring it either intestate, depending upon the properties sought to be disposed of
repealed or still in force. by him and those to be inherited by his heirs on intestate succession
2. SC cannot agree to the contention of Ramon Bilbao that the provisions of when not covered by the will.
the Code of Civil Procedure on wills have completely superseded Chapter 5. Rule: SC does not pass upon the legality, enforceability, or applicability of a
I, Title III of the Civil Code on wills, resulting in the complete repeal of the law unless that point is raised and put in issue, and it is necessary to rule upon
Civil Code provisions. it in order to determine the case.

Jurisprudence proving harmonious application of Code of Civ Procedure and CC On Art. 669 of CC
3. (IMPT) There are a number of cases decided by the SC wherein articles of 6. The provision of Art. 669 of the CC prohibiting the execution of a will by
the Civil Code regarding wills have been referred to and also have been two or more persons conjointly or in the same instrument either for their
applied side by side with the provisions of the Code of Civil Procedure (and reciprocal benefit or for the benefit of a third person, is not unwise and is not
therefore, not exactly correct that the Code of Civil Procedure on wills against public policy.
have superseded the provisions of the Civil Code on the same): 7. The reason for the provision is that when a will is made jointly or in the same
a. In the matter of the will Kabigting: where the will was executed in 1908, instrument, the spouse who is more aggressive, stronger in will or
articles 662 and 663 of the Civil Code regarding capacity and incapacity character and dominant is liable to dictate the terms of the will for his or
of persons to dispose by will, have been cited and applied together her own benefit or for that of third persons whom he or she desires to
with section 618 of the Code of Civil Procedure regarding requisites of favor.
wills. 8. And where the will is not only joint but reciprocal, either one of the spouses
b. Torres and Lopez De Bueno v. Lopez, article 666 of the Civil Code who may happen to be unscrupulous, wicked, faithless or desperate, knowing
regarding mental capacity of the testator has been cited and applied as he or she does the terms of the will whereby the whole property of the
together with section 614 and 634 of the Code of Civil Procedure spouses both conjugal and paraphernal goes to the survivor, may be tempted
regarding a will executed in 1924.
to kill or dispose of the other.
c. Postigo v. Borjal; In re Estate of Calderon; Natividad v. Gabino:
9. Considering this, SC believes and rules that Art. 669 of the CC is still in force.
wherein the wills involved had been executed after the enactment of the
Code of Civil Procedure, particularly the sections regarding wills, a. Supported by Justice Willard as shown on his notes on the CC
article 675 of the Civil Code regarding interpretation of wills was cited b. Sinco and Capistrano in their work on the CC, Vol. II favorably cite
and applied. Justice Willard’s opinion
d. Samson v. Naval: article 739 of the Civil Code regarding revocation of c. Lastly, SC finds that Art. 669 has been reproduced word for
wills has been applied in harmony with section 623 of the Code of word in Art. 818 of the New Civil Code (RA No. 386). The
Civil Procedure. The will involved was executed in 1915 when the Code implication is that the PH Legislature and the members of the
of Civil Procedure was already in force. Code Commission are of the opinion that Art. 669 of the old CC
are not incompatibly with those of the Code of Civil Procedure.
Macrohon Ong Ham v. Saavedra case 10. In conclusion, the provisions of the Code of Civil Procedure regarding wills
4. (IMPT) It was contended that a case (Macrohon Ong Ham v Saavedra) where have not repealed all the articles of the old Civil Code on the same subject
matter, and that article 669 of the Civil Code is not incompatible or
inconsistent with said provisions of the Code of Civil Procedure, and that
finally, said article 669 of the Civil Code is still in force.
 009 ENRIQUEZ v. ABADIA(Sarmiento) a. He left properties estimated at P8,000 in value.
August 9, 1954| Montemayor, J. | Succession 3. On October 2, 1946, one Andres Enriquez, one of the legatees filed a petition
for its probate in the Court of First Instance of Cebu.
PETITIONER: In re: Will and Testament of the deceased REVEREND a. Some cousins and nephews who would inherit the estate of the
deceased if he left no will, filed opposition.
SANCHO ABADIA. SEVERINA A. VDA. DE ENRIQUEZ, ET AL
4. During the hearing one of the attesting witnesses, the other two being dead,
testified without contradiction that in his presence and in the presence of his
RESPONDENTS: MIGUEL ABADIA, ET AL
co-witnesses, Father Sancho wrote out in longhand in Spanish which the
testator spoke and understood;
SUMMARY: On September 6, 1923, Father Sancho Abadia executed a will. He
a. that he (testator) signed on he left hand margin of the front page of
died, and left properties. Andres, one of the legatees filed a petition for probate
each of the three folios or sheets of which the document is
but it was opposed by cousins and nephews who would inherit if Sancho did not
composed, and numbered the same with Arabic numerals, and
leave a will. one of the attesting witnesses, the other two being dead, testified
finally signed his name at the end of his writing at the last page, all
that it was duly executed. RTC admitted the will to probate. It declared that the
this, in the presence of the three attesting witnesses after telling that
will was holographic that it was in the handwriting of the testator and that
it was his last will and that the said three witnesses signed their
although at the time it was executed and at the time of the testator's death,
names on the last page after the attestation clause in his presence
holographic wills were not permitted by law still, because at the time of the
and in the presence of each other.
hearing and when the case was to be decided (1952) the new Civil Code was
b. The oppositors did not submit any evidence.
already in force, which Code permitted the execution of holographic wills, under
5. RTC: found and declared the will to be a holographic will; that it was in the
a liberal view. ISSUE: Whether or not the extrinsic validity of the will is
handwriting of the testator and that although at the time it was executed and
determined by the law when it was to be decided—NO. The law to be
at the time of the testator's death, holographic wills were not permitted by law
followed should be at the time the will was made. The new Civil Code
still, because at the time of the hearing and when the case was to be decided
(Republic Act No. 386) under article 810 thereof provides that a person may
the new Civil Code was already in force, which Code permitted the execution
execute a holographic will which must be entirely written, dated and signed by
of holographic wills, under a liberal view, and to carry out the intention of
the testator himself and need not be witnessed. However, that at the time that the
the testator which according to the trial court is the controlling factor and may
will was executed in 1923 and at the time that Father Abadia died in 1943,
override any defect in form, said trial court by order dated January 24, 1952,
holographic wills were not permitted. Article 795 of this same new Civil Code
admitted to probate as the Last Will and Testament of Father Sancho Abadia.
expressly provides:"The validity of a will as to its form depends upon the
6. The oppositors are appealing from that decision; and because only questions
observance of the law in force at the time it is made." Thus, validity of a will is
of law are involved in the appeal, the case was certified to us by the Court of
to be judged not by the law enforce at the time of the testator's death or at the
Appeals.
time the supposed will is presented in court for probate or when the petition is
decided by the court but at the time the instrument was executed.
ISSUE: Whether or not the extrinsic validity of the will is determined by the
law when it was to be decided—NO. The law to be followed should be at the time
DOCTRINE: Article 795 of this same new Civil Code expressly provides:"The
the will was made.
validity of a will as to its form depends upon the observance of the law in force at
the time it is made.
RULING: In view of the foregoing, the order appealed from is reversed, and Exhibit
"A" is denied probate. With costs.

FACTS: RATIO:
1. The new Civil Code (Republic Act No. 386) under article 810 thereof
1. On September 6, 1923, Father Sancho Abadia, parish priest of Talisay, Cebu, provides that a person may execute a holographic will which must be entirely
executed a document purporting to be his Last Will and Testament written, dated and signed by the testator himself and need not be witnessed.
2. Resident of the City of Cebu, he died on January 14, 1943, in the municipality a. It is a fact, however, that at the time that the will was executed in
of Aloguinsan, Cebu, where he was an evacuee. 1923 and at the time that Father Abadia died in 1943, holographic
 wills were not permitted, and the law at the time imposed certain a. This ruling has been laid down by this court in the case of In re Will
requirements for the execution of wills, such as numbering of Riosa
correlatively each page (not folio or sheet) in letters and signing on b. It is a wholesome doctrine and should be followed.
the left hand margin by the testator and by the three attesting 7. Of course, there is the view that the intention of the testator should be the
witnesses, requirements which were not complied with in the ruling and controlling factor and that all adequate remedies and
willbecause the back pages of the first two folios of the will were interpretations should be resorted to in order to carry out said intention, and
not signed by any one, not even by the testator and were not that when statutes passed after the execution of the will and after the death of
numbered, and as to the three front pages, they were signed only by the testator lessen the formalities required by law for the execution of wills,
the testator. said subsequent statutes should be applied so as to validate wills defectively
2. Interpreting and applying this requirement this Court in the case of In re executed according to the law in force at the time of execution.
Estate of Saguinsin, referring to the failure of the testator and his witnesses a. However, we should not forget that from the day of the death of the
to sign on the left hand margin of every page, said: testator, if he leaves a will, the title of the legatees and devisees
a. . . . . This defect is radical and totally vitiates the testament. It is not enough under it becomes a vested right, protected under the due process
that the signatures guaranteeing authenticity should appear upon two folios clause of the constitution against a subsequent change in the statute
or leaves; three pages having been written on, the authenticity of all three adding new legal requirements of execution of wills which would
of them should be guaranteed by the signature of the alleged testatrix and invalidate such a will.
her witnesses.
b. By parity of reasoning, when one executes a will which is invalid
3. And in the case of Aspe vs. Priet referring to the same requirement, this Court
for failure to observe and follow the legal requirements at the time
declared:
of its execution then upon his death he should be regarded and
a. From an examination of the document in question, it appears that the left
margins of the six pages of the document are signed only by Ventura Prieto. declared as having died intestate, and his heirs will then inherit by
The noncompliance with section 2 of Act No. 2645 by the attesting intestate succession, and no subsequent law with more liberal
witnesses who omitted to sign with the testator at the left margin of each of requirements or which dispenses with such requirements as to
the five pages of the document alleged to be the will of Ventura Prieto, is a execution should be allowed to validate a defective will and thereby
fatal defect that constitutes an obstacle to its probate. divest the heirs of their vested rights in the estate by intestate
4. What is the law to apply to the probate the will? succession.
a. May we apply the provisions of the new Civil Code which not c. The general rule is that the Legislature can not validate void wills
allows holographic wills, like the will, which provisions were
invoked by the appellee-petitioner and applied by the lower court?
5. But article 795 of this same new Civil Code expressly provides:
a. "The validity of a will as to its form depends upon the observance of
the law in force at the time it is made."
i. The above provision is but an expression or statement
of the weight of authority to the affect that the validity
of a will is to be judged not by the law enforce at the
time of the testator's death or at the time the supposed
will is presented in court for probate or when the
petition is decided by the court but at the time the
instrument was executed.
6. One reason in support of the rule is that although the will operates upon and
after the death of the testator, the wishes of the testator about the disposition
of his estate among his heirs and among the legatees is given solemn
expression at the time the will is executed, and in reality, the legacy or
bequest then becomes a completed act.
 CAYETANO v. LEONIDAS (SIAPNO) will appeared to have preterited the petitioner and thus, the respondent
May 30, 1984 | Gutierrez Jr., J. | judge should have denied its reprobate outright, the private respondents
have sufficiently established that Adoracion was, at the time of her
PETITIONER: Polly Cayetano death, an American citizen and a permanent resident of Philadelphia,
RESPONDENTS: HON. TOMAS T. LEONIDAS, in his capacity as the Pennsylvania, U.S.A. Therefore, under Article 16 par. (2)82 and 103983 ,
Presiding Judge of Branch XXXVIII, Court of First Instance of Manila The law which governs Adoracion’s will is the law of Pennsylvania,
and NENITA CAMPOS PAGUIA U.S.A., which is the national law of the decedent. Although the parties
admit that the Pennsylvania law does not provide for legitimes and that
SUMMARY: all the estate may be given away by the testatrix to a complete stranger,
Adoracion Campos was an American citizen at the time of her death and the Cayetano argues that such law should not apply because it would
was a permanent resident of Pennsylvania, U.S.A., leaving her father, be contrary to the sound and established public policy and would run
petitioner Hermogenes Campos and her sisters, one of them being private counter to the specific provisions of Philippine Law. It is a settled rule that
respondent Nenita C. Paguia. Adoracion died in Manila while temporarily as regards the intrinsic validity of the provisions of the will, as provided
residing with her sister, leaving properties in the Philippines and USA. for by Article 16 (2) and 1039 of the Civil Code, the national law of the
Adoracion made her last will and testament according to the laws of decedent must apply. Although on its face, the will appeared to have
Pennsylvania, U.S.A. After Adoracion’s death, her last will and testament preterited the petitioner and thus, the respondent judge should have
was presented, probated, allowed, and registered with the Registry of denied its reprobate outright, the private respondents have
Wills at the County of Philadelphia, U.S.A. As Hermogenes was the only sufficiently established that Adoracion was, at the time of her death,
compulsory heir, he executed an Affidavit of Adjudication. , Nenita filed an American citizen.
a petition for the reprobate of Adoracions will, which was allegedly DOCTRINE: It is therefore evident that whatever public policy or good
executed in the US and for her appointment as administratrix of the estate customs may be involved in our system of legitimes, Congress has not
of the deceased testatrix. An opposition to the reprobate of the will was intended to extend the same to the succession of foreign nationals. For
filed by Hermogenes alleging that the intrinsic provisions of the will are it has specifically chosen to leave, inter alia, the amount of successional
null and void. Hermogenes died and was substituted by Cayetano. rights, to the decedent’s national law. Specific provisions must prevail
Cayetano maintains that since the respondent judge allowed the reprobate over general ones.
of Adoracion’s will, Hermogenes was divested of his legitime which
was reserved by the law for him. Main issue was WON Philippine law FACTS:
would apply to the intrinsic validity of the will executed by an undisputed 1. On January 31, 1977, Adoracion C. Campos died, leaving her
foreigner? The law which governs Adoracion’s will is the law of father, petitioner Hermogenes Campos and her sisters, private
Pennsylvania, U.S.A., which is the national law of the decedent.
respondent Nenita C. Paguia, Remedios C. Lopez and Marieta
Pennsylvania law does not provide for legitimes. In the case at bar, the
Cayetano maintains that since the respondent judge allowed the reprobate C. Medina as the surviving heirs.
of Adoracion’s will, was divested of his legitime which was reserved by 2. As Hermogenes was the only compulsory heir, he executed an
the law for him. This contention is without merit. Although on its face, the Affidavit of Adjudication under Rule 74, Section I of the ROC.

82 83
"However, intestate and testamentary successions, both with respect to the order of succession Art. 1039. "Capacity to succeed is governed by the law of the nation of the
and to the amount of successional rights and to the intrinsic validity of testamentary provisions, decedent."
shall be regulated by the national law of the person whose succession is under consideration,
whatever may be the nature of the property and regardless of the country wherein said property
may be found.
3. 11 months after, Nenita filed a petition for the reprobate of 6. Respondent judge issued an order holding that at the hearing,
Adoracions will, which was allegedly executed in the US and it has been satisfactorily established that :
for her appointment as administratrix of the estate of the a. Adoracion, in her lifetime, was a citizen of the USA
deceased testatrix. b. that when alive, Adoracion executed a Last Will and
a. Nenita alleged that the testatrix was an American citizen at Testament in the county of Philadelphia, Pennsylvania,
the time of her death and was a permanent resident of 4633 U.S.A., according to the laws thereat;
Ditman Street, Philadelphia, Pennsylvania, U.S.A.; c. that while in temporary sojourn in the Philippines, Adoracion
b. testatrix died in Manila while temporarily residing with her died in Manila leaving property both in the Philippines and in
sister in Malate, Manila; the USA;
c. that during her lifetime, the testatrix made her last will and d. that the Last Will and Testament of the late Adoracion was
testament according to the laws of Pennsylvania, nominating admitted and granted probate by the Orphan’s Court Division
Wilfredo Barzaga of New Jersey as executor; of the Court of Common Pleas, the probate court of the
d. that after the testatrix’ death, her last will and testament was Commonwealth of Pennsylvania, County of Philadelphia,
presented, probated, allowed, and registered with the Registry U.S.A.,
of Wills at the County of Philadelphia, e. letters of administration were issued in favor of McLaughlin,
e. that Clement L. McLaughlin, the administrator who was all in accordance with the laws of the said foreign country on
appointed after Dr. Barzaga had declined and waived his procedure and allowance of wills and that the Nenita is not
appointment as executor, is also a resident of Philadelphia, suffering from any disqualification which would render her
U.S.A., and unfit as administratrix of the estate in the Philippines of the
f. therefore, there is a need for the appointment of an late Adoracion
administratrix to administer the properties of the estate in the 7. Adoracion’s will was admitted to probate and Nenita was
Philippines. appointed as Administratrix. Letters of Administration with the
4. An opposition to the reprobate of the will was filed by Will annexed was issued in her favor
Hermogenes alleging among other things, that he has every 8. Another manifestation was filed by the Hermogenes confirming
reason to believe that the will in question is a forgery; that the the withdrawal of his opposition, acknowledging the same to be
intrinsic provisions of the will are null and void; and that even his voluntary act and deed)
if pertinent American laws on intrinsic provisions are invoked, (following facts are not important but just in case ma’am asks for the procedural facts)
9. Hermogenes filed a petition for relief, praying that the order allowing the will be set
the same could not apply inasmuch as they would work injustice aside on the ground that the withdrawal of his opposition to the same was secured
and injury to him. through fraudulent means. According to him, the "Motion to Dismiss Opposition" was
5. However, Hermogenes through his counsel, Atty. Loyola, filed inserted among the papers which he signed in connection with two Deeds of
Conditional Sales which he executed with the Construction and Development
a Motion to Dismiss Opposition (With Waiver of Rights or Corporation of the Philippines (CDCP). He also alleged that the lawyer who filed the
Interests) stating that he "has been able to verify the veracity withdrawal of the opposition was not his counsel-of-record in the special proceedings
thereof (of the will) and now confirms the same to be truly the case. The PTR was set for hearing but the Hergmogenes failed to appear. He made
several motions for postponement until the hearing was set on May 29, 1980.
probated will of his daughter Adoracion." Hence, an ex-parte 10. On May 18, 1980, Hermogenes filed another motion entitled "Motion to Vacate and/or
presentation of evidence for the reprobate of the questioned will Set Aside the Order of January 10, 1979, and/or dismiss the case for lack of
was made. jurisdiction.
11. This was re-set by the court for June 19, 1980. When the case was called for hearing ISSUE/s:
on this date, the counsel for Hermogenes tried to argue his motion to vacate instead 1. WON respondent judge acted with GAD when he allowed the
of adducing evidence in support of the petition for relief. Thus, the respondent judge
issued an order dismissing the PTR for failure to present evidence in support thereof. withdrawal of the Hermogenes’ opposition to the reprobate of the will
12. Hermogenes filed an MR, denied. - No grave abuse of discretion, no proof was adduced to support
13. Meanwhile, on June 6, 1982, Hermogenes died and left a will, Hermogenes’ contention that the motion to withdraw was secured
which, incidentally has been questioned by Nenita, his through fraudulent means and that Atty. Loyola was not his counsel
children and forced heirs as, on its face patently null and of record.
2. WON the right of a forced heir to his legitime can be divested by a
void, and a fabrication, appointing Polly Cayetano as the
decree admitting a will to probate in which no provision is made for
executrix of his last will and testament. Cayetano, therefore, the forced heir in complete disregard of Law of Succession (IMPT
filed a motion to substitute herself as petitioner in the instant ISSUE) – NO, The law which governs Adoracion’s will is the law
case which was granted by the court of Pennsylvania, U.S.A., which is the national law of the decedent.
14. A MTD the petition on the ground that the rights of Hermogenes Pennsylvania law does not provide for legitimes
merged upon his death with the rights of Nenita and her sisters, 3. WON The settlement of the estate of Adoracion Campos was correctly
only remaining children and forced heirs was denied on filed with the CFI of Manila - Correct since it was alleged and proven
September 1983 the Adoracion at the time of her death was a citizen and
15. Cayetano persists with the allegations that the respondent judge permanent resident of Pennsylvania and not a "usual resident of
acted without or in excess of his jurisdiction when: Cavite". Moreover, petitioner is now estopped from questioning the
1) He ruled the petitioner lost his standing in court deprived the Right to jurisdiction of the probate court in the petition for relief.
Notice upon filing of the MTD opposition with waiver of rights or interests 4. WON there was a denial of due process for lack of notice of hearing -
against the estate of Adoracion, thus, paving the way for the ex-parte The records will bear the fact that what was repeatedly scheduled for
hearing of the petition for the probate of decedent will. hearing was the petitioner’s petition for relief and not his motion to vacate
2) He ruled that Hermogenes can waive, renounce or repudiate (not made
in a public or authenticated instrument), or by way of a petition presented RULING: WHEREFORE, the petition for certiorari and prohibition is
to the court but by way of a motion presented prior to an order for the hereby dismissed for lack of merit.
distribution of the estate — the law especially providing that repudiation
of an inheritance must be presented, within 30 days after it has issued an RATIO:
order for the distribution of the estate (ROC). Validity of the provisions of the will
3) He ruled that the right of a forced heir to his legitime can be 1. As a general rule, the probate court’s authority is limited only
divested by a decree admitting a will to probate in which no provision to the extrinsic validity of the will, the due execution thereof, the
is made for the forced heir in complete disregard of Law of Succession. testatrix’s testamentary capacity and the compliance with the
4) He denied Hermogenes’ PTR on the ground that no evidence was requisites or solemnities prescribed by law.
adduced to support the petition when no Notice nor hearing was set to 2. The intrinsic validity of the will normally comes only after the
afford petitioner to prove the merit of his petition — a denial of the due court has declared that the will has been duly authenticated.
process and a grave abuse of discretion amounting to lack of jurisdiction. However, where practical considerations demand that the
5) He acquired no jurisdiction over the testate case, the fact that the
intrinsic validity of the will be passed upon, even before it is
Testator at the time of death was a usual resident of Dasmariñas,
Cavite, consequently CFI Cavite has exclusive jurisdiction over the
probated, the court should meet the issue.
case
3. In the case at bar, the Cayetano maintains that since the 8. Bellis v. Bellis: It is therefore evident that whatever public
respondent judge allowed the reprobate of Adoracion’s will, was policy or good customs may be involved in our system of
divested of his legitime which was reserved by the law for him. legitimes, Congress has not intended to extend the same to
4. This contention is without merit. Although on its face, the will the succession of foreign nationals. For it has specifically
appeared to have preterited the petitioner and thus, the chosen to leave, inter alia, the amount of successional rights, to
respondent judge should have denied its reprobate outright, the decedent’s national law. Specific provisions must prevail
the private respondents have sufficiently established that over general ones. The parties admit that the decedent, Bellis,
Adoracion was, at the time of her death, an American citizen was a citizen of the State of Texas and under their, there are no
and a permanent resident of Philadelphia, Pennsylvania, U.S.A. forced heirs or legitimes. Accordingly, since the intrinsic
Therefore, under Article 16 par. (2) and 1039 of the Civil Code validity of the provision of the will and the amount of
which respectively provide: successional rights are to be determined under Texas law, the
"However, intestate and testamentary successions, both with Philippine Law on legitimes cannot be applied to the testacy
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary The settlement of the estate of Adoracion Campos was correctly filed with the
provisions, shall be regulated by the national law of the CFI of Manila
person whose succession is under consideration, whatever may 9. The contention of the petition as to the issue of jurisdiction
be the nature of the property and regardless of the country utterly devoid of merit. Under Rule 73, Section 1, of the Rules
wherein said property may be found." of Court, it is provided that: "SECTION 1. Where estate of
Art. 1039. "Capacity to succeed is governed by the law of the deceased persons settled. — If the decedent is an inhabitant of
nation of the decedent." the Philippines at the time of his death, whether a citizen or an
5. The law which governs Adoracion’s will is the law of alien, his will shall be proved, or letters of administration
Pennsylvania, U.S.A., which is the national law of the granted, and his estate settled, in the Court of First Instance in
decedent. Although the parties admit that the Pennsylvania law the province in which he resided at the time of his death, and if
does not provide for legitimes and that all the estate may be he is an inhabitant of a foreign country, the Court of First
given away by the testatrix to a complete stranger, the Cayetano Instance of any province in which he had estate. The court first
argues that such law should not apply because it would be taking cognizance of the settlement of the estate of a decedent,
contrary to the sound and established public policy and shall exercise jurisdiction to the exclusion of all other courts.
would run counter to the specific provisions of Philippine Law. The jurisdiction assumed by a court, so far as it depends on the
6. It is a settled rule that as regards the intrinsic validity of the place of residence of the decedent, or of the location of his estate,
provisions of the will, as provided for by Article 16 (2) and 1039 shall not be contested in a suit or proceeding, except in an appeal
of the Civil Code, the national law of the decedent must apply. from that court, in the original case, or when the want of
7. Although on its face, the will appeared to have preterited the jurisdiction appears on the record."
petitioner and thus, the respondent judge should have 10. Therefore, the settlement of the estate of Adoracion Campos was
denied its reprobate outright, the private respondents have correctly filed with the CFI of Manila where she had an estate
sufficiently established that Adoracion was, at the time of since it was alleged and proven the Adoracion at the time of
her death, an American citizen. her death was a citizen and permanent resident of
 Pennsylvania, United States of America an not a "usual
resident of Cavite" as alleged by the petitioner.
11. Moreover, petitioner is now estopped from questioning the
jurisdiction of the probate court in the petition for relief. It is a
settled rule that a party cannot invoke the jurisdiction of a
court to secure affirmative relief, against his opponent and
after failing to obtain such relief, repudiate or question that
same jurisdiction.

No grave abuse of discretion on the part of the respondent judge (not main issue
just in case ma’am asks)
1. No proof was adduced to support petitioner’s contention that the motion
to withdraw was secured through fraudulent means and that Atty. Franco
Loyola was not his counsel of record.
2. The records show that after the filing of the contested motion,
Hermogenes at a later date, filed a manifestation wherein he confirmed
that the Motion to Dismiss Opposition was his voluntary act and deed.
3. Moreover, at the time the motion was filed, the Hermogenes’ former
counsel, Atty. Lagrosa had long withdrawn from the case and had been
substituted by Atty. Loyola who in turn filed the motion.
4. Cayetano cannot, therefore, maintain that the Hermogenes’ attorney of
record was Atty. Lagrosa at the time of filing the motion. Since the
withdrawal was in order, the respondent judge acted correctly in hearing
the probate of the will ex-parte, there being no other opposition to the
same.

Absence of Notice of Hearing for PTR (not main issue just in case ma’am asks)
1. As regards the alleged absence of notice of hearing for the petition for
relief, the records will bear the fact that what was repeatedly scheduled
for hearing on separate dates until June 19, 1980 was the petitioner’s
petition for relief and not his motion to vacate the order of January 10,
1979.
2. There is no reason why the petitioner should have been led to believe
otherwise. The court even admonished the petitioner’s failing to adduce
evidence when his petition for relief was repeatedly set for hearing. There
was no denial of due process. The fact that he requested "for the future
setting of the case for hearing . . ." did not mean that at the next hearing,
the motion to vacate would be heard and given preference in lieu of the
petition for relief.
3. Furthermore, such request should be embodied in a motion and not in a
mere notice of hearing.
 022 MATTHEWS v. TAYLOR (GALINDEZ) (Boracay property) siuated in Aklan for and in consideration of P129,000 –
Month, date, year | Nachura, J. | Ownership of Property the sale was allegedly financed by Benjamin.
2. The spouses also using Benjamin’s funds constructed improvements thereon
and eventually converted it to a vacation and tourist resort named Admiral
PETITIONER: Philip Matthews
Ben Bow Inn. All permits and licenses were obtained in the name of Ginna
RESPONDENTS: Benjamin and Joselyn Taylor
Celestino, Joselyn’s sister.
3. The spouses had a falling out and Joselyn ran away with Kim Philippsen.
SUMMARY: Joselyn (Filipina) married Benjamin (British). Using Benjamin’s
Joselyn then executed an SPA in favor of Benjamin, authorizing him to
money, Joselyn purchased a lot in Boracay under her name. Also using
maintain, sell, lease and sublease and otherwise enter into contract with third
Benjamin’s money, they build improvements thereon and converted it into a
parties with respect to the Boracay property.
resort. Joselyn ran away from Benjamin with Kim, and she executed an SPA over
4. On July 1992, Joselyn as lessor and petitioner Philip as lessee, entered into
the property in favor of Benjamin authorizing Benjamin to maintain, sell, lease
an Agreement of Lease over the Boracay property for a period of 25 years
and sublease and otherwise enter into contract with third parties with respect to
with an annual rate of P12k. The agreement was notarized and the resort was
the Boracay property.
renamed as Music Garden Resort.
5. Claiming that the Agreement was null and void since it was entered into by
Joselyn later entered into a Lease Agreement with petitioner Philip over the
Joselyn without his (Benjamin’s) consent, Benjamin instituted an action for
property. Benjamin sought to nullify such alleging that he’s the true owner of the
Declaration of Nullity of Agreement of Lease with Damages against Joselyn
property as it was his funds that were used to purchase it, and Joselyn cannot enter
and Philip. Benjamin claimed that his funds were used in the acquisition and
into contracts over the properties without his consent.
improvement of the Boracay property, and coupled with the fact that he was
Joselyn’s husband, any transaction involving said property required his
The RTC and CA, using Civil and Family Code provisions, ruled in favor of
consent.
Benjamin and nullified the contract. However, using Constitutional provisions,
6. No Answer was filed hence RTC declared Joselyn and Philip in default. The
the SC reversed (See Doctrine and Ratio 6). The rule is clear and inflexible: aliens
RTC rendered judgment declaring the Agreement as null and void but such
are absolutely not allowed to acquire public or private lands in the Philippines,
was set aside by the CA, which also ordered the RTC to allow Philip to file
save only in constitutionally recognized exceptions. Benjamin has no right to
his Answer and conduct further proceedings.
nullify the Agreement of Lease between Joselyn and Philip. Benjamin, being an
7. Philip claimed good faith in transacting with Joselyn. Since Joselyn appeared
alien, is absolutely prohibited from acquiring private and public lands in the
to be the owner of the Boracay property, he found it unnecessary to obtain
Philippines.
the consent of Benjamin.
8. Moreover, as appearing in the Agreement, Benjamin signed as a witness to
DOCTRINE: Sec. 7 Article XII of the 1987 Constitution states: Section 7. Save
the contract, indicating his knowledge of the transaction and, impliedly, his
in cases of hereditary succession, no private lands shall be transferred or conveyed
conformity to the agreement entered into by his wife. Benjamin was,
except to individuals, corporations, or associations qualified to acquire or hold
therefore, estopped from questioning the validity of the Agreement.
lands of the public domain. Aliens, whether individuals or corporations, have
9. RTC rendered judgment in favor of Benjamin and declared the Agreement
been disqualified from acquiring lands of the public domain. Hence, by virtue of
void. Joselyn and Philip were also ordered to pay damages representing
the aforecited constitutional provision, they are also disqualified from acquiring
unrealized income and attorney’s fees.
private lands. The primary purpose of this constitutional provision is the
10. RTC considered the Boracay property as community property of Benjamin
conservation of the national patrimony. Our fundamental law cannot be any
and Joselyn; thus, the consent of the spouses was necessary to validate any
clearer. The right to acquire lands of the public domain is reserved only to Filipino
contract involving the property.
citizens or corporations at least sixty percent of the capital of which is owned by
11. Although the Agreement was evidenced by a public document, the trial court
Filipinos.
refused to consider the alleged participation of Benjamin in the questioned
transaction primarily because his signature appeared only on the last page of
FACTS: the document and not on every page thereof.
1. On June 30, 1988, Benjamin (British) married Joselyn (17 y/o Filipina). 12. The CA affirmed the RTC’s decision because if indeed, Benjamin was a
While their marriage was subsisting, Joselyn bought from Diosa Martin a lot willing participant in the questioned transaction, the parties to the Agreement
 should have used the phrase "with my consent" instead of "signed in the themselves who may alienate their agricultural lands in favor of aliens. It is
presence of." Moreover, since Joselyn executed an SPA in favor of Benjamin, partly to prevent this result that Section 5 is included in Article XIII, and it
it was unnecessary for her to participate in the execution of the Agreement. reads as follows:
b. "Section 5. Save in cases of hereditary succession, no private agricultural
land will be transferred or assigned except to individuals, corporations, or
ISSUE/s:
associations qualified to acquire or hold lands of the public domain in the
1. WoN the Lease Agreement is valid – YES. Benjamin has no right to nullify Philippines."
the Agreement of Lease between Joselyn and Philip. Benjamin, being an c. This constitutional provision closes the only remaining avenue through
alien, is absolutely prohibited from acquiring private and public lands in the which agricultural resources may leak into alien’s hands. It would certainly
Philippines. be futile to prohibit the alienation of public agricultural lands to aliens if,
after all, they may be freely so alienated upon their becoming private
RULING: WHEREFORE, premises considered, the December 19, 2003 Decision and agricultural lands in the hands of Filipino citizens.
d. The term "private agricultural lands" is to be construed as not including
July 14, 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 59573, are
residential lots or lands not strictly agricultural, the result would be that
REVERSED and SET ASIDE and a new one is entered DISMISSING the complaint "aliens may freely acquire and possess not only residential lots and houses
against petitioner Philip Matthews. for themselves but entire subdivisions, and whole towns and cities," and that
"they may validly buy and hold in their names lands of any area for building
RATIO: homes, factories, industrial plants, fisheries, hatcheries, schools, health and
2. It is undisputed that Joselyn acquired the Boracay property, evidenced by a vacation resorts, markets, golf courses, playgrounds, airfields, and a host of
other uses and purposes that are not, in appellant’s words, strictly
Deed of Sale with Joselyn as vendee. The property was also declared for tax
agricultural." (Solicitor General’s Brief, p. 6) That this is obnoxious to the
purposes under her name. conservative spirit of the Constitution is beyond question.
3. When Joselyn leased the property to Philip, Benjamin sought to nullify the 7. The rule is clear and inflexible: aliens are absolutely not allowed to acquire
contract on two grounds: public or private lands in the Philippines, save only in constitutionally
a. He was the actual owner since he provided the funds used in recognized exceptions
purchasing the property 8. Ting Ho v. Teng Gui:
b. Joselyn can’t enter into a valid contract involving the subject a. Felix Ting Ho, a Chinese citizen, acquired a parcel of land, together with
property without his consent the improvements thereon. Upon his death, his heirs (the petitioners therein)
4. RTC and CA used the Civil and Family Code but failed to appreciate the claimed the properties as part of the estate of their deceased father, and
important Constitutional provisions. sought the partition of said properties among themselves. We, however,
5. Sec. 7 Article XII of the 1987 Constitution states: Section 7. Save in cases of excluded the land and improvements thereon from the estate of Felix Ting
hereditary succession, no private lands shall be transferred or conveyed Ho, precisely because he never became the owner thereof in light of the
except to individuals, corporations, or associations qualified to acquire or above-mentioned constitutional prohibition.
hold lands of the public domain. Aliens, whether individuals or corporations, 9. Muller v. Muller:
a. Petitioner Elena Buenaventura Muller and respondent Helmut Muller were
have been disqualified from acquiring lands of the public domain. Hence, by
married in Germany. During the subsistence of their marriage, respondent
virtue of the aforecited constitutional provision, they are also disqualified purchased a parcel of land in Antipolo City and constructed a house thereon.
from acquiring private lands. The primary purpose of this constitutional The Antipolo property was registered in the name of the petitioner. They
provision is the conservation of the national patrimony. Our fundamental law eventually separated, prompting the respondent to file a petition for
cannot be any clearer. The right to acquire lands of the public domain is separation of property. Specifically, respondent prayed for reimbursement
reserved only to Filipino citizens or corporations at least sixty percent of the of the funds he paid for the acquisition of said property. In deciding the case
capital of which is owned by Filipinos. in favor of the petitioner, the Court held that respondent was aware that as
6. Krivenko v. RD cited in Muller v. Muller: an alien, he was prohibited from owning a parcel of land situated in the
a. Under Section 1 of Article XIII of the Constitution, "natural resources, with Philippines. He had, in fact, declared that when the spouses acquired the
the exception of public agricultural land, shall not be alienated," and with Antipolo property, he had it titled in the name of the petitioner because of
respect to public agricultural lands, their alienation is limited to Filipino said prohibition. Hence, we denied his attempt at subsequently asserting a
citizens. But this constitutional purpose conserving agricultural resources in right to the said property in the form of a claim for reimbursement. Neither
the hands of Filipino citizens may easily be defeated by the Filipino citizens did the Court declare that an implied trust was created by operation of law
 in view of petitioner’s marriage to respondent. We said that to rule 17. In fine, the Agreement of Lease entered into between Joselyn and petitioner
otherwise would permit circumvention of the constitutional prohibition. cannot be nullified on the grounds advanced by Benjamin. Thus, we uphold
10. Frenzel v. Catito: its validity.
a. Petitioner, an Australian citizen, was married to Teresita Santos; while
respondent, a Filipina, was married to Klaus Muller. Petitioner and
respondent met and later cohabited in a common-law relationship, during
which petitioner acquired real properties; and since he was disqualified
from owning lands in the Philippines, respondent’s name appeared as the
vendee in the deeds of sale. When their relationship turned sour, petitioner
filed an action for the recovery of the real properties registered in the name
of respondent, claiming that he was the real owner. Again, as in the other
cases, the Court refused to declare petitioner as the owner mainly because
of the constitutional prohibition. The Court added that being a party to an
illegal contract, he could not come to court and ask to have his illegal
objective carried out. One who loses his money or property by knowingly
engaging in an illegal contract may not maintain an action for his losses.
11. Cheesman v. IAC:
a. Petitioner (an American citizen) and Criselda Cheesman acquired a parcel
of land that was later registered in the latter’s name. Criselda subsequently
sold the land to a third person without the knowledge of the petitioner. The
petitioner then sought the nullification of the sale as he did not give his
consent thereto. The Court held that assuming that it was his (petitioner’s)
intention that the lot in question be purchased by him and his wife, he
acquired no right whatever over the property by virtue of that purchase; and
in attempting to acquire a right or interest in land, vicariously and
clandestinely, he knowingly violated the Constitution; thus, the sale as to
him was null and void.
12. Benjamin has no right to nullify the Agreement of Lease between Joselyn and
Philip. Benjamin, being an alien, is absolutely prohibited from acquiring
private and public lands in the Philippines.
13. Considering that Joselyn appeared to be the designated "vendee" in the Deed
of Sale of said property, she acquired sole ownership thereto.
14. This is true even if we sustain Benjamin’s claim that he provided the funds
for such acquisition. By entering into such contract knowing that it was
illegal, no implied trust was created in his favor; no reimbursement for his
expenses can be allowed; and no declaration can be made that the subject
property was part of the conjugal/community property of the spouses.
15. In any event, he had and has no capacity or personality to question the
subsequent lease of the Boracay property by his wife on the theory that in so
doing, he was merely exercising the prerogative of a husband in respect of
conjugal property.
16. To sustain such a theory would countenance indirect controversion of the
constitutional prohibition. If the property were to be declared conjugal, this
would accord the alien husband a substantial interest and right over the land,
as he would then have a decisive vote as to its transfer or disposition. This is
a right that the Constitution does not permit him to have.
 011 MOLINA v. DE LA RIVA (TIMBOL) Consequently, the award cannot be larger than what was alleged in the
March 22, 1906 | Mapa, J. | Contracts complaint.
The fourth assignment of error is that the court erred into taking into consideration
PETITIONER: Rafael Molina Y Salvador as the basis of its judgment the contract in question, which is allegedly null and
RESPONDENTS: Antonio De La Riva void. De La Riva contends that the contract is void because it does not contain
the required internal-revenue stamp tax. The court held that Act No. 1045 refers
SUMMARY: Molina transferred to De La Riva entered into a contract in July to documents executed on or after October 1, 1904, that are subject to tax,
27, 1903 to transfer to the latter the abaca and coprax business at various places and therefore require the internal-revenue stamp tax. The case at bar refers
in the Island of Catanduanes with all the property and right pertaining to the said to a contract executed July 27, 1903, which clearly, is not subject ot the stamp
business for the sum of P134,646.03, payable in Mexican currency or its tax required in Act No. 1045.
equivalent in local currency. De La Riva was bound to pay the balance of
P33,659.03 in three installments, but defaulted on the first. Thus, Molina DOCTRINE: The two sections (Secs. 9 and 10) above quoted refer to other
commenced this action to recover a debt due. De La Riva demmured to the provisions of the same Act No. 1045. Sec. 9 refer expressly to secs. 6 and 7. Sec.
complaint, but was overruled, yet did not file an answer. Therefore, the court 9, as well as sec. 10, refers to documents which should be stamped in accordance
rendered a judgment in favor of Molina for the sum of P33,659.03 Mexican with the provisions of the same act. These provisions are contained in secs. 6 and
currency, or equal to P30,052.80. De La Riva then contends this judgment, and 7 above referred to, the documents subject to the stamp tax being therein
raised for assignment of errors. enumerated

The first assignment of error was that the court had no jurisdiction over the subject It seems clear from the language of these two latter sections that only such
matter, because De La Riva alleged that based on the power of attorney, they were contracts payable in local currency as were made on or after Oct 1 1904, are
residents of Catanduanes and therefore, jurisdiction should be there and not in subject to the stamp tax
CFI of Manila. The court held that when it comes to personal actions, the
plaintiff has the option to elect which place to file, whether his residence or FACTS:
the defendants residence. The basis for the determination of which place to 1. This is an action to recover a debt due upon a contract executed July 27, 1903,
file is the actual residence at the time of filing of the compliant. In this case, whereby Molina transferred to De la Riva the abaca and coprax business
the actual residence at the time of filing is the City of Manila. theretofore carried on by him at various places in the Island of Catanduanes,
with all the property and right pertaining to the said business, for the sum of
The second assignment of error raised by De La Riva was that the court failed to 134,636 pesos and 12 cents, payable in Mexican currency or its equivalent in
hear evidence as to the relative value of the Mexican and Philippine currency. local currency
And that the since De La Riva was granted the option to decide on which currency 2. De La Riva paid at the time of the execution of the contract, on account of
to pay, the court should have directed the payment of Philippine Peso. The court the purchase price, the sum of P33,659.0 3 cents, promising to pay the balance
held that there is no need to hear evidence as to the relative value. The on three installments P33,659.03 cents each, with interest at the rate of 5%
complaint alleged the amount in peso at the time of the filing of the p.a. from the date of the contract
complaint, which was not generally or specifically denied by De La Riva. a. The first installment became due, it was for this installment that the
Rather, De La Riva opted to demur, as such, the equivalent relative value of action for recovery was brought in the CFI of Manila
Mexican and Philippine currency is deemed admitted. With regard to which 3. De La Riva demurred to the complaint on the ground that the court had no
currency the court should have directed De La Riva to pay, the court held jurisdiction of the subject of the action
that even if such contention is true, it is not sufficient as a ground for reversal a. The court overruled the demurrer
of judgment, because there was no prejudice of essential rights. b. De La Riva refused to and did not answer Molina’s complaint
4. Judgment having been rendered in favor of Molina for the sum of 33,659
The third assignment of error was that the court erred in awarding a judgment pesos and 3 cents, Mexican currency, equal to P30,052.70, an interest
larger than what was pleaded. The court held that it did make an error, since thereon at the rate of 5% p.a.
the case at hand involves a defendant who did not file an answer. 5. Thus De La Riva assigns four errors with regard to the judgment rendered
 against him:
a. That the court had no jurisdiction of the subject of the action RATIO:
b. That the court erred in fixing in PHP the sum which Molina should
recover, without hearing evidence as tot eh relative value of First assignment: CFI has Jurisdiction
Mexican and Philippine currency 1. It is alleged in support of this contention that Molina and De La Riva were
i. The fact that De La Riva was given the option to pay the residents of the Island of Catanduanes, as would appear, as Molina is
debt either in Mexican or Philippine currency, claiming concerned, from a power of attorney, executed by him to Antonio Valencia
that the court should have directed payment to be made in and introduced in evidence during the trial
the latter currency as required by Act No. 1045 a. The instrument in fact contains the statement that Molina was a
c. That the court erred in rendering judgment in a sum larger than that resident of Catanduanes
sought to be recovered in the complaint b. Nothing is said however as to the residence of De La Riva
d. That the court took into consideration as the basis of its jdugmentt 2. The complaint was filed in March 10, 1905, and it alleges that both Molina
he contract in question, the same being null and void and De La Riva were residents of the city of Manila
a. This allegation was not either generally or specifically denied by De
ISSUE/s: La Riva, who refused and failed to give an answer to the complaint,
13. WoN CFI of Manila had jurisdiction – YES. When it comes to personal having merely demurred thereto, thus must be admitted
actions, the plaintiff has the option either to file at the resident of the plaintiff 3. The power of attorney having been executed in August 1901, does not and
or of the defendant. And the basis for the resident is the actual residence at can not by itself prove that the parties were not residents of the city of Manila
the time of filing of the complaint. The parties may not agree to submit in march, 1905, when the complaint was filed
themselves to another court of which none of them are residents 4. The actual residence, and not that which the parties had four years, prior
14. WoN evidence should have been presented for the relative value of the to the filing of the complaint, is the one that should govern the question
Mexican and the Philippine currency – NO. Because of the demurrer of De as to the jurisdiction of the court
La Riva, the allegation that the proper conversion of the amount into PHP is 5. A personal action like this for the record of a debt may be brought, under
deemed admitted. There being no dispute, such amount is proper at the time Sec. 377 of the Code of Civil Procedure, in the CFI of the province where
of filing of the complaint. the plaintiff resides or in the province where the defendant may reside,
a. WoN the CFI should have ordered payment of PHP – such at the election of the plaintiff
contention is not sufficient to amount to a reversal of judgment a. Both parties to the case being residents of the city of Manila, it is
15. WoN the court erred in granting more than what was pleaded – YES. The apparent that the CFI of that city had jurisdiction to try and
relief granted to a plaintiff, if there be no answer, cannot exceed that which determine this action
he shall have demanded in his complaint 6. The alleged mutual designation in the contract that the parties submit
16. WoN the contract was null and void – NO. Because the requirement of the themselves to the jurisdiction of the CFI of the Province of Albay, in which
internal-revenue stamp is only for contracts executed on or after Oct 1, 1904. the town of Bato was located had no legal force and could not have the effect
The contract in this case was executed July 27, 1903 of depriving the CFI of Manila of the jurisdiction conferred on it by law
7. The jurisdiction of a court is filed by law and not by the will of the parties
RULING: The judgment of the court below is hereby affirmed, provided, however, a. As a matter of public policy, parties can only stipulate in regard to
that the plaintiff shall only be entitled to recover from the defendant the sum of 28,049 that which is expressly authorized by law
pesos and 19 centavos, Philippine currency, with accrued interest thereon from July b. Sec. 377 provides a plain and definite rule for the purpose of
determining the jurisdiction of courts according to the nature of the
27, 1903, until fully paid, at the rate of 5 per cent per annum, no special order being
action
made as to costs of this appeal. c. Neither that section nor any other provision of law, of which we
have any knowledge, authorizes the parties to submit themselves by
After the expiration of twenty days from the date hereof let judgment be entered an express stipulation to the jurisdiction of a particular court to the
accordingly, and let the case be remanded to the Court of First Instance for such action exclusion of the court duly vested with such jurisdiction
as may be proper. So ordered. 8. We consequently hold that the agreement between the parties to submit
 themselves to the jurisdiction of the CFI of Albay, if there was any such 1. The prayer of the complaint is for specific amount of P28,049.19, and the court
agreement, was null and void, in so far as it had for its object to deprive in its judgment ordered De La Riva to pay to Molina P30,052.70
the CFI of Manila of its own jurisdiction 2. Sec. 126 Civ Pro: The relief granted to the plaintiff, if there be no answer,
9. It is not true as contended by De La Riva that the right which litigants had cannot exceed that which he shall have demanded in his complaint
nder the Spanish law to submit themselves to the jurisdiction of a particular 3. De La Riva failed to answer. Under such circumstances plaintiff could not
court was governed by the provisions of the Civil Code have obtained more than what he had demanded in his complaint. Molina’s
a. Such right was recognized and governed by the provisions of law of demand was for the sum of P28.049.19 only. The court had no power to enter
procedure and not by the substantive loaw judgment in favor of Molina for P30,052.70
b. The right to contract, recognized in the Civil and referred to by De
La Riva, has nothing to do with the right to establish and fix the Fourth assignment: Contract is valid (RELEVANT)
jurisdiction of a court 1. De La Riva alleges that the contract did not bear the internal-revenue
stamp required by Act no. 1045 of the Philippine Commission enacted
Second assignment: Evidence need not be heard, and Mexican currency could be January 27, 1904, and relies particularly upon the provisions of Secs. 9 and
granted 10 of the act
1. The amount sought to be recovered in this action, under the terms of the 2. Sec. 9 reads:
contract, was 33,859.03, payable in Mexican currency, or its equivalent in a. Every check, draft, note, bond, bill of exchange, every contract
local currency whatsoever payable in local currency shall be presumably subject
2. Par. 4 of the complaint alleged that: to the taxes levied in accordance with the provisions of this act,
a. Under the terms of the contract the actual amount due from De and the obligation shall rest upon the drawer or maker, or holder or
La Riva to Molina, converted into Philippine currency is beneficiary who claims exemption, to prove that he is entitled to
P28,049.19 any of the exemptions provided in this act.
3. It was not necessary to hear evidence as to the relative value of Mexican and b. No check, draft, note, bond, bill of exchange, or any contract,
Philippine currency, because De La Riva demurred, and thus, Molina’s whatsoever payable in local currency shall be exempted from
allegation should be deemed admitted payment of the stamp tax provided for in secs. 6 and 7 of this act
4. There is no dispute between the parties as to the fact that the 33,659.03, unless the contract for which exemption is claimed shall be
Mexican currency, referred to in the contract, were equal to P28,049.19, registered with the CIR or his deputy before Oct 1, 1904, and a
at the time of the filing of the complaint certificate be attached thereto by the CIR, or his deputy,
5. The proof required by Sec. 3 of Act No. 1045, should be received only when certifying the exemption
the parties disagree as to the relative value of the currency 3. Sec. 10 reads:
6. In addition, De La Riva also assigns as error the fact that he was given the a. Every check, draft, note bond, bill of exchange, and every contract
option to pay the debt either in Mexican or Philippine currency, claiming that whatsoever which is not properly stamped in accordance with
the court should have directed payment to be made in the latter currency as the provisions of this act, shall be void
required by Act No. 1045 4. The two sections above quoted refer to other provisions of the same Act No.
a. Assuming this contention is correct, it should nevertheless be 1045. Sec. 9 refer expressly to secs. 6 and 7. Sec. 9, as well as sec. 10, refers
true that it did not prejudice any of his essential rights to documents which should be stamped in accordance with the provisions of
b. It is well known that in the case of an alternative obligation the the same act. These provisions are contained in secs. 6 and 7 above referred
debtor has the right to choose the method of meeting the obligation to, the documents subject to the stamp tax being therein enumerated
unless the creditor has expressly reserved that right to himself 5. Sec. 6 provides:
c. Sec. 503 of the Code of Civil Procedure: No judgment shall be a. Every check, note, draft, bond, bill of exchange, and every contract
reversed for such error as has not prejudiced the substantial rights whatsoever payable wholly or in part in local currency, and
of the excepting party draw or made upon or subsequent to Oct 1, 1904, shall bear
upon its face an internal revenue stamp or stamps of the face
Third assignment: Court erred in rendering judgment in a sum larger than that value in PH currency to the amount hereinafter provided
sought to be recovered 6. Sec. 7 provides:
 a. Every transfer of ownership, by indorsement or otherwise, after
Sept 30, 1904, of a check, draft, note, bond, bill of exchange, or
any contract whatsoever payable wholly or in part in local
currency in the PI after the Sep 30, 1904, shall be considered a
separate and distinct contract, and as such shall require a
stamp or stamps
7. It seems clear from the language of these two latter sections that only such
contracts payable in local currency as were made on or after Oct 1 1904, are
subject to the stamp tax
a. The provisions of the section in question are very clear and leave
no room for doubt
b. Secs. 9 and 10 are merely supplementary to Secs. 6 and 7
c. They provide a method for proving the exemption from the stamp
tax and penalty in case of failure to comply with the provisions of
Secs. 6 and 7
d. These latter sections are the ones which require a stamp tax upon
all contracts payable in local currency and declare what documents
shall be subject to such tax
8. It is therefore necessary to construe these sections (6 and 7) together with
Secs. 9 and 10 in order to arrive at the proper conclusion
a. A full and correct interpretation of the act in question would not be
possible if we only consider the two latter sections
9. The contract under consideration was executed July 27, 1903
a. Such contract was not subject to the stamp tax provided in Act
No. 1045
b. The penalty of nullity prescribed in Sec 10 of the act is not
applicable to that contract
c. The court, therefore, committed no error in finding that the
absence of revenue stamp did not render the contract void
 012 INSULAR GOVERNMENT v. FRANK (CHIQUI)
March 23, 1909 | Johnson, J. | Contracts FACTS:

PETITIONER: The Government of the Philippine Islands 1. On April 17, 1903 in Chicago, Illinois, Frank, through a representative of the
RESPONDENT: George I. Frank Insular Government of the Philippine Islands, entered into a contract for a
period of two years with the PH government, by which Frank was to receive
SUMMARY: Frank and the PH government entered into a contract in Chicago, a salary of 1,200 dollars per year as a stenographer in the service of the said
Illinois where Frank will be employed as a stenographer for 2 years. He was to be government, and in addition thereto was to be paid in advance the expenses
paid $1,200 a year and the government will shoulder the travel expenses. In case of incurred in traveling from the said city of Chicago to Manila, and one-half
violation, Frank will be liable for the amount incurred in traveling from Chicago to salary during said period of travel.
Manila and one-half salary paid during the period. It was also agreed upon by the 2. Said contract contained a provision that in case of a violation of its terms on
parties that Laws No. 80 and No. 224 will form part of the contract. Subsequently, the part of Frank, he should become liable to the PH government for the
Frank left the service after a few months and refused to comply with the terms of amount expended by the Government by way of expenses incurred in
the contract. The PH government filed a claim against him in Manila. Frank argued traveling from Chicago to Manila and the one-half salary paid during such
that first, the laws forming part of the contract were amended and thus altered their period.
agreement and second, under the PH law where the contract was made, male persons 3. Frank entered upon the performance of his contract upon the April 30, 1903,
in the PH reach the majority at 23 years old so as a minor, the contract cannot be and was paid half-salary from that date until June 4, 1903, the date of his
enforced against him. arrival in the Philippine Islands.
4. On February 11, 1904, Frank left the service of the PH government and
W/N the contract was affected by the amended of Acts No. 80 and No. 643 – NO, refused to make a further compliance with the terms of the contract.
the legislative department of the Government is expressly prohibited by section 5 of 5. On December 3 1904, the PH government commenced an action in CFI of
the Act of Congress of 1902 from altering or changing the terms of a contract. the city of Manila to recover from Frank the sum of 269.23 dollars, which
(doctrine 1) amount the PH government claimed had been paid to the Frank as expenses
incurred in traveling from Chicago to Manila, and as half salary for the period
W/N the contract can be enforced against Frank because of his alleged minority - consumed in travel.
NO, at the time the contract was entered into in the State of Illinois, he was an adult a. It was expressly agreed between the parties to said contract that
under the laws of that State and had full authority to contract. (doctrine 2) . He was Laws No. 80 and No. 224 should constitute a part of said contract.
fully qualified to enter into the contract at the place and time the contract was made, 6. Frank filed a general denial and a special defense, alleging in his special
he cannot plead infancy as a defense at the place where the contract is being defense that the Government of the Philippine Islands had amended Laws
enforced. No. 80 and No. 224 and had thereby materially altered the said contract, and
also that he was a minor at the time the contract was entered into and was
therefore not responsible under the law.
DOCTRINE: The right which Frank had acquired by virtue of Acts No. 80 and No. 7. The PH government filed a demurrer, which demurrer the court sustained.
224 had not been changed in any respect by the fact that said laws had been 8. CFI rendered a judgment against the Frank and in favor of the PH government
amended. These acts, constituting the terms of the contract, still constituted a part for the sum of 265.90 dollars and it found that at the time Frank quit the
of said contract and were enforceable in favor of Frank. (doctrine 1) service of the PH government there was due him the sum of 3.33 dollars,
leaving a balance due to the PH government in the sum of 265.90 dollars.
No rule is better settled in law than that matters bearing upon the execution,
interpretation and validity of a contract are determined by the law of the place where ISSUE/s:
the contract is made. Matters connected with its performance are regulated by the 1. W/N the contract was affected by the amended of Acts No. 80 and No. 643 –
law prevailing at the place of performance. Matters respecting a remedy, such as the NO, the legislative department of the Government is expressly prohibited by
bringing of suit, admissibility of evidence, and statutes of limitations, depend upon section 5 of the Act of Congress of 1902 from altering or changing the terms
the law of the place where the suit is brought. (doctrine 2) of a contract.
2. W/N the contract can be enforced against Frank because of his alleged
 minority - NO, at the time the contract was entered into in the State of contract, more than a year later, is not tenable. He was fully qualified to enter
Illinois, he was an adult under the laws of that State and had full authority to into the contract at the place and time the contract was made, he cannot plead
contract. infancy as a defense at the place where the contract is being enforced.

RULING: For the reasons above stated, the judgment of the lower court is affirmed,
with costs.

RATIO:

1. It may be said that the mere fact that the legislative department of the
Government of the Philippine Islands had amended said Acts No. 80 and No.
224 by Acts No. 643 and No. 1040 did not have the effect of changing the
terms of the contract made between the PH government and Frank. The
legislative department of the Government is expressly prohibited by
section 5 of the Act of Congress of 1902 from altering or changing the
terms of a contract. The right which Frank had acquired by virtue of
Acts No. 80 and No. 224 had not been changed in any respect by the fact
that said laws had been amended. These acts, constituting the terms of
the contract, still constituted a part of said contract and were enforceable
in favor of Frank.
2. The record discloses that, at the time the contract was entered into in the State
of Illinois, he was an adult under the laws of that State and had full authority
to contract.
3. Frank claims that, by reason of the fact that, under the laws of the Philippine
Islands at the time the contract was made, male persons in said Islands did
not reach their majority until they had attained the age of 23 years, he was
not liable under said contract, contending that the laws of the Philippine
Islands governed.
a. It is not disputed—upon the contrary the fact is admitted—that at
the time and place of the making of the contract in question the
Frank had full capacity to make the same. No rule is better settled
in law than that matters bearing upon the execution,
interpretation and validity of a contract are determined by the
law of the place where the contract is made. (Scudder vs. Union
National Bank, 91 U. S., 406.) Matters connected with its
performance are regulated by the law prevailing at the place of
performance. Matters respecting a remedy, such as the bringing
of suit, admissibility of evidence, and statutes of limitations,
depend upon the law of the place where the suit is brought.
(Idem.)
4. Frank’s claim that he was an adult when he left Chicago but was a minor
when he arrived at Manila; that he was an adult at the time he made the
contract but was a minor at the time the plaintiff attempted to enforce the
 013 Ibanez v. HSBC (Valle) 3. Joaquin and Zoilo were born in the Philippines on 1884 and 1885 respectively
23 March 1915 | Trent, J. | Contracts as the legitimate children of Zoilo Ibanez and Isabel Palet. Their parents were
natives of spain. The father’s domicile was in manila and he died there in
PETITIONER: Joaquin Ibañes De Aldecoa Y Palet, et al 1895. The widow, still retaining her domicile in Manila, went to Spain in
RESPONDENTS: Hongkong and Shanghai Banking Corporation et al. 1897 because of her health and did not return until 1902.
4. Joaquin and Zoilo accompanied her and returned with her in 1902. After the
SUMMARY: death of their father, the firm of Aldecoa and Co was reorganized and his
Joaquin and Zoilo are sons of Isabel and Zoilo Ibanez (the dad). When the father widow became one of the general or capitalistic partners. In the articles of
died, the firm of Aldecoa and CO was reaognized and Isable became one of the copartnership, Joaquin and Zoilo appear as partners.
general partenrs and the Articles of copartnership said that the sons were partners. 5. Isabel Palet went before the notary public and executed 2 instruments where
Isabel emancipated her children with their consent. No guardian was appointed. she emancipated her two sons with their consent. No guardian of the person
When Aldecoa and Co became indebted to HSBC, they entered into a mortgage or property of the sons had ever been applied for or appointed. Instead, the
contract with HSBC which included their own real properties. Aldecoa and Co sons continued from the detah of their father under the custody of their
expired by limitation of the partnership term and went into liquidation. The sons mother.
commenced an action against Isabel and Aldecoa where the sons were decreed as 6. Aldecoa and Co became heavily indebted to HSBC and HSBC was desirious
creditors of the firm. in collecting or securing payment. The correspondence between HSBC,
The issue is whether or not the current law allows Isabel to legally emancipate Isabel, and the sons showed that HSBC will foreclose on the account unless
The sons. Yes. the same was guaranteed by securities. It was proposed that Isabel and the
The issue related to the discussion is whether or not the contract entered into by sons should mortgage in addition to securities of Aldecoa and Co their real
the sons, Isabel, and HSBC is valid. Yes it is. It was argued that the contract is properties. The mortgage was then executed in 1906. Later in 1906, the firm
void as to the sons for reason of a lack of consideration. It was urged that the expired by limitation of the partnership term and the firm went into
mortgage was executed under the impression that they were partners of Aldecoa liquidation.
and Co when as decided by final judgment in the CFI, they were not such partners. 7. The firm required an injunction bond of 50K which was furnished by HSBC
By the same judgment which released the sons from their obligations as partners upon the condition that any liability incurred on the part of HSBC upon the
of the firm, they were declared creditors of that firm. Here was a valid and injunction bond would be covered by themortgage.
subsisting consideration for the mortgage; the creditors' desire to preserve the firm 8. An agreement to this effect was executed by Isabel , by Joaquin, who had
intact in the hope of recovering from it in due course their total credits. It seems then attained his full majority, and by Zoilo Ibañez de Aldecoa, who was not
clear that it was the object of the mother and the sons to thus save the business, yet 23 years of age. Subsequent thereto, and in 1908, the sons commenced an
and it matters little that the sons were creditors. action against their mother and Aldecoa and Co., in which the bank was not
DOCTRINE: a party and in September of that year, procured a judgment annulling the
Art 1276 of the Civil Code provides: articles of copartnership of Aldecoa and Co., in so far as the sons were
concerned, and decreeing that they were creditors and not partners of that
“A statement of false consideration in contracts shall render them void unless it firm.
be proven that they were based on another real and licit one.”
ISSUE/s:
1. WoN Isabel could legally emancipate the sons under the law in force in this
FACTS: country in July, 1903 and thus confer upon them capacity to execute a valid
1. Joaquin Ibanes de Alcoa (Joaquin) and Zoilo Ibanes de Alcoa (Zoilo) mortgage on their real property with her consent. Note: this is the main issue
(collectively as the sons) commenced this action in 1908 to cancel a certain of the case. The answer to this the second issue. – YES, because Under the
instrumemt of mortage execited by them jointly with Aldecoa and Co and Civil Code, a child might be emancipated formally (art. 315) or impliedly
Isable Palet in favor of HSBC. (art. 160) by the parent..
2. In the mortgage, various properties of Aldecoa and Co and of Isabel Palet and 2. WoN the mortgage contract was valid as to the sons – YES it matters not that
of Joaquin and Zoilo were used to secure the payment unto the bank of an the sons were partners or creditors to the firm. Art 2176 says that a statement
overdraft of Aldecoa and Co amounting to 475, 000. of false consideration in contracts shall render them void unless it be proven
 that they were based on another real and licit one. Since it doesn’t natter that from its operation.
they’re creditors or partners of the firm, there is still consideration. Which 6. Section 551 provides that the court may appoint a guardian of the person or
makes the mortgage contract valid. estate of minor. Certainly, this language is comprehensive enough to include
all minors, whether their parents are living or not. Section 553 expressly
RULING: The judgment of the court below, in so far as it sustains the validity of the abolished the prerogative of the father and the mother in the order named, of
mortgage contract as to Joaquin Ibañez de Aldecoa, is affirmed. In so far as that administering the property of their minor children, and gives the court power
judgment declares the nullity of the mortgage as to Zoilo Ibañez de Aldecoa, it is to appoint another person. here the specific language of the law shows that
guardianship is meant to include minor children whose parents or one of them
reversed, and the mortgage is hereby declared binding upon the latter.
are living.
7. These, as well as other specific provisions of the new code, made it clear that
No costs will be allowed in this instance.
the repugnance between the patria potestad and the new law of guardianship
RATIO:
is such that the parent, as such, no longer has the power to enjoy the
1. Under the Civil Code, parents had general control over the persons of their
administration and usufruct of the property of his minor children
children and also over their property.
8. It will be noted that by emancipating his child, the parent surrenders to it the
2. The contrast between the patria potestad (parental authority) of the Civil
right to the usufruct and administration of his property. This, of course, is
Code and guardianship under our present code of procedure is none the less
based upon the a priori condition of the law of patria potestad that the parent
marked.
has the usufruct and administration of the child's property to give, which, as
a. The latter requires a guardian to obtain his appointment from the
we have seen, he no longer has. Not having the right in the first place, and,
court; to execute a bond for the faithful performance of his duties;
hence, no authority to concede it to his child, the formal emancipation of a
to make an inventory of the property, the management of which he
minor child by the parent cannot now have the effect prescribed.
undertakes and to render accounts at specified intervals; to manage
9. For were this power of emancipating his minor child still retained by the
the estate of his ward frugally and without waste and apply the
parents, the parents could but the exercise of it, depiove the court guardian of
income and profits thereof to the support of the ward so far as may
the administration and control of the estate or, the court proceedings with
be necessary.
reference to the person and property of the minor child would, by the parents
b. A guardian is a court officer, responsible to the court, and
act, be annulled.
dischargeable by the court alone.
10. The ight of administration and usufruct of the child's property, granted
3. There was, however, no conflict between the patria potestad and guardianship
by the former law to the parent, and the right of the latter to emancipate
under the Civil Code. This was for the reason, as stated above that the law of
his child in accordance with the provisions of article 314 et seq., of the
guardianship expressly excluded the patria potestad from its operation.
Civil Code, whereby the child takes over the administration and usufruct
4. For the purpose of inaugurating a procedure on the subject of guardianship
of his own property, have been repealed.
more in consonance with the remainder of the new procedure, whole sections
11. So far as the property of the child is concerned, the rights of the parent must
of the California probate procedure were incorporated almost verbatim in the
be subordinated to the efficient working of the new law of guardianship.
new code.
12. The court concludes that the emancipation of the sons in 1903 is no sufficient
a. The borrowed sections comprise practically all of our present law of
reason in and of itself, for holding that a statutory guardian ought to have
guardianship.
been forthwith appointed under the provisions of the new Code of Civil
b. As there is no such institution in the States of California as the patria
Procedure.
potestad it is manifest that no provision saving it from the operation
13. Article 167 provides that the patria potestad terminates by the emancipation
of the law of guardianship would be found in the laws of the States.
of the child. Article 314 provides that emancipation takes place (1) by
c. Note: The patria potestad is from Spanish Law. So when the New
marriage; (2) by majority; and (3) by the concession of the father or mother
code of procedure was enacted, it took the California law and the
exercising the patria potestad. Under the Civil Code, a child might be
California Law has nothing on the patria potestad.
emancipated formally (art. 315) or impliedly (art. 160) by the parent. In
5. In other words, the law of guardianship in California extended to and
either case his contracts with third persons were binding upon him,
included minor children whose parents were still living. It was this law which
except when they tended to divest him of his real property.
was incorporated into the new code of procedure, and the Philippines
14. It was by this 314(3) method that Isabel terminated her patria potestad over
Commission inserted no exception saving the institution of patria protested
 the sons. Article 317 provides that upon emancipation by concession of the them by reason of the saving provision in sec 581.
parent the child is qualified to control his person and property as if of age, 21. The SC avoided a discussion of the political status of the sons basing the
with the exception that until he attains his majority, he cannot borrow money decision entirely upon the laws of the Phil.
nor encumber or sell his real property without the consent of the parent, or, 22. It was argued that the contract is void as to the sons for reason of a lack of
in the absence thereof, of a guardian. consideration. It was urged that the mortgage was executed under the
15. There was no such break in the duties of the parent, the inexperienced child impression that they were partners of Aldecoa and Co when as decided by
was not so utterly thrown upon the tender mercies of selfish world as to final judgment in the CFI, they were not such partners.
require the intervention of a guardian appointed under the new law. Unless 23. However, Art 1276 of the Civil Code provides:
the new law of guardianship abrogated the rights of those parents a. “A statement of false consideration in contracts shall render them
administering the estates of their minor into children under the patria potestad void unless it be proven that they were based on another real and
at the time it went into effect, it did not abrogate the rights of those same licit one.”
parents of to subsequently emancipate such children 24. By the same judgment which released the sons from their obligations as
16. The change in the new code: It had, furthermore, endowed the minor child partners of the firm, they were declared creditors of that firm. Here was a
after emancipation by concession of the parent with the capacity to freely valid and subsisting consideration for the mortgage; the creditors' desire to
contract with thirds persons, requiring only the parent's approval of contracts preserve the firm intact in the hope of recovering from it in due course their
in alienation of or encumbering the child's real property and for the borrowing total credits. It seems clear that it was the object of the mother and the sons
of money. to thus save the business, and it matters little that the sons were creditors
17. And lastly, it gave to third person entering into contracts with emancipated and not partners.
children assurance that such contract were binding and valid upon the
children.
18. The new law of guardianship practically placed the parent in the position of
a stranger to the child's estate, giving him only a preferential right, other
things being equal, to an appointment as guardian of the estate. It brought the
child's estate under the control of the court. And finally, the incapacity of the
children between the age of 18 and the age of majority to contract with third
persons could not be modified in the least by mutual consent of the parent
and child, and hence, contracts made in that manner were no longer binding
upon the child.
19. There can be no question that Isabel exercised parental authority over her
children had by her deceased husband Aldecoa and availed herself of a
perfectly legal right, supported by the regulations of their law of persons, as
Spaniards, in granting emancipation to her sons Zoilo and Joaquin, over 18
years old, and in giving them her consent so that they might encumber their
respective shares in realty or property which they had inherited from their
deceased father, for the purpose of maintaining the credit enjoyed by the
commercial firm entitled "Aldecoa & Co.," and to avoid a premature and
unnecessary liquidation at the instance of the Hongkong Bank.
VALIDITY OF MORTGAGE CONTRACT (IMPORTANT)
NOTE: The case was submitted for rehearing. This issue wasn’t in the main case
but was in the decision for the rehearing.
20. It is urged that the decision overlooked the fact that the sons are citizens of
this country and hence, governed by Phil laws. Without determining the
political status of the sons, the court has endeavored to show that clothing the
sons with Phil citizenshop, the present law of guardianship does not apply to
 014 COMPAGNIE v. HAMBURG-AMERIKA (VICENCIO) port designed in the contract of affreightment. BUT: when the condition of the cargo is such
March 31, 1917 | Carson, J. | Contracts as to render it inadvisable to attempt to tranship, or if there is ground to believe that such will
be the case before suitable means of transhipment can be secured, the duty clearly rests upon
PETITIONER: Compagnie De Commerce Et De Navigation D’Extreme Orient the master to make such other advantageous disposition of the property of the shipper as
RESPONDENTS: The Hamburg Amerika Packetfact Actien Gesellshchaft circumstances will permit.

SUMMARY: Compagnie, a French corporation, filed a suit for damages against Hamburg, a WoN Compagnie is correct in its contention that Hamburg is responsible for the
German corporation. The Steampship Sambia, owned by Hamburg by virtue of a Charter deterioration of the cargo incident to its detention in Manila - NO. Having in mind the
Party, proceeded to the port of Saigon where it was thenn carrying cargo (rice and rice meal) extraordinary and exceptional conditions existing at that time as a result of the war, with its
belonging to Compagnie. On August 1914 however, there were rumours of an impending interruptions of mail and cable communications, it is error to say that the master devoted an
war between Germany, France and other nations of Europe. Hence, Hamburg instructed the unreasonable length of time to the determination of the problem of the disposition of the
master of its steamship to go to a neutral port for refuge, since the Saigon was a French Port. cargo with which he was confronted after, his arrival in Manila Bay. On the contrary, he did
The Compagnie opposed however, so the master stayed in Saigon. On August 4, from all that could be required of a prudent man to protect the interests of the owner of the cargo
Saigon, the steamship went to Manila where it had remained continuously owing to the aboard his vessel. Any losses must be attributed to the act of the "enemies of the king,"
condition of the war. In Manila, Hamburg's agent attempted to communicate with which compelled Sambia to flee to the port of refuge in the first place.
Compagnie by cable messages, proposing to purchase the cargo. But these messages were
left an answered. After the survey was made declaring the cargo was weevil and heating, the DOCTRINE: A master could not be required to act on the very day of his arrival; or before
master of the steamship applied for the court to sell said cargo. The proceeds were then he had a reasonable opportunity to ascertain whether he could hope to carry out his contract
deposited to the Court. Hamburg's agent then wrong to Compagnie again informing them of and earn his freight; and that he should not be held responsible for a reasonable delay
the disposition. Compagnie answered but said they choose abstain from interfering then. incident to an effort to ascertain the wishes of the freighter, and upon failure to secure
Compagnie then filed this suit for the full value of the cargo, claiming Hamburg failed to prompt advices, to decide for himself as to the course which he should adopt to secure the
safely carry the merchandise and cargo tot he destination, against the charter party. Hamburg interests of the absent owner of the property aboard his vessel.
filed a cross-complaint seeking a lien upon the proceeds of the sale by way of general
average. The lower court ruled in favour of Compagnie but did not grant the full amount of WoN Hamburg's claim for freight should be granted - NO. Under the terms of the
the cargo. Both of them appealed. contract of affreightment, the amount of the freight was made payable on delivery of the
cargo at the designated port of destination. Carrying the cargo from Saigon to Manila was
WoN the Hamburg's deviation of the steamship from the route prescribed in the not even a partial performance of a contract to carry it from Saigon to Europe; and even if it
charter party was justified - YES. There was a necessity arising out of the presence of could be treated as such, the shipowner would have no claim for freight, in the absence of
enemy cruisers on the high seas which compelled the Sambia, once she had left the port of any agreement, express or implied, to make payment for a partial performance of the
Saigon, to take refuge in the port of Manila and to stay there indefinitely pending the contract.
outcome of the war. Hamburg is not liable for the resultant damages herein.
WoN Hamburg's contention that the court had no jurisdiction because of the provision
DOCTRINE: Necessity does not mean irresistible compelling power. If a man has the duty in the charter party for the settlement of disputes for arbitration in London has merit -
cast upon him of taking some action for another, and under that obligation adopts a course NO. Hamburg not only appeared and answered in the lower court without objecting to the
which, to the judgment of a wise and prudent man, is apparently the best for the interest of court's jurisdiction, but it also sought affirmative relief.
the persons for whom he acts in a given emergency, it may properly be said of the course so
taken that it was in a mercantile sense necessary to take it. DOCTRINE: A contractual stipulation for a general arbitration cannot be invoked to oust
our courts of their jurisdiction.
WoN Compagnie was correct in its contention that it was imperative upon the master
of Sambia to tranship the cargo on a neutral vessel to one of the ports of destination WoN Hamburg is entitled for general average - NO, under the York-Antwerp Rules of
designated in contract of affreightment (instead of abandoning the the voyage) - NO. 1890 (which the charter party bound parties to adhere to). In fleeing from the port of Saigon
The cargo was perishable. It would be impractical to secure prompt instructions from the and taking refuge in Manila Bay the master of the Sambia was not acting for the common
shipper. The master elected, after taking the advice of a competent marine surveyor, to sell safety of the vessel and her cargo. The French cargo was absolutely secure from danger of
the entire cargo under judicial authority. This appears to be the only course open to him seizure or confiscation so long as it remained in the port of Saigon, and there can be no
during the circumstances question that the flight of the Sambia was a measure of precaution adopted solely and
exclusively for the preservation of the vessel from danger of seizure or capture.
DOCTRINE: Under ordinary circumstances, in the absence of instructions from a shipper
whose goods are abroad a vessel in refuge that he be consulted to transport the cargo to the
DOCTRINE: Claims for contribution in general average must be supported by proof that 58. That the steamship Sambia came directly from Saigon to Manila, where it arrived
sacrifices on account of which such claims are submitted were made to avert a common on the 8th day of August, 1914, and where she has remained continuously ever
imminent peril, and that extraordinary expenses for which reimbursement is sought, were since owing to the condition of war existing between Germany, France, Great
incurred for the joint benefit of ship and cargo. Britain and Russia, and where the Hamburg says she will be compelled to remain
until said war conditions cease.
FACTS: [Note: Bear with the long digest since this is 52-paged case (SCRA)]
59. That upon and after the arrival of said steamship at Manila no attempt was made by
the owners, master arid agent of the said steamship to complete the voyage
50. This is an appeal from an action (in the lower court) by: the Compagnie de according to the charter party or to deliver the said cargo to the stipulated
Commerce et de Navigation D'Extreme Orient (Compagnie), a corporation duly
destinations, or to tranship the said cargo to said destinations, or to conserve the
organized and existing under and by virtue of the laws of the Republic of France, with
perishable merchandise composing the said cargo.
its principal office in the city of Paris, France, and a branch office in the city of Saigon
60. That on or about August 7, and 14, 1914, the Hamburg's agent in Manila, Behn,
51. Against: the Hamburg Amerika Packetfacht Actien Gesellschaft (Hamburg), a Meyer & Company, attempted to communicate with the Compagnie by cable
corporation duly organized under and by virtue of the laws of the Empire of Germany,
messages to Saigon, making an offer to purchase the cargo on said steamship, but
with its principal office in the city of Hamburg, Germany, and represented in the city
the messages were not received by the Compagnie and therefore were not
of Manila by Behn, Meyer & Company (Limited), a corporation.
answered; that on September 7, 1914, the Hamburg's said agent wrote to the
52. The Compagnie seeks to recover the full value in Saigon of a certain cargo (rice and Compagnie in relation to the cargo informing it of the condition of same.
ricemeal) of the steamship Sambia, alleged to amount to the sum of P266,930,
61. That on September 10, 1914, a survey was made of the said cargo, and it was found
Philippine currency, and prays that certain proceeds of the sale of said cargo,
to be weevilly and heating, and the master of said steamship thereupon applied to
amounting to P135,766.01, now on deposit in this court, be applied on said judgment,
this court for authority to sell said cargo, and under such authority the cargo was
and that judgment be rendered in favor of the Compagnie and against the Hamburg
sold for the sum of P182,591.46, and the balance of said cargo was dumped into
for such sum as may represent the difference between the said amount and the value
the sea by order of the port authorities as unfit for sale, and the proceeds of the
of the payment and delivery unto Compagnie from said deposit, with legal interest
sale in the sum of P135,766.01 after deducting certain expenses incident to the sale,
and costs of suit.
were deposited in this court to await the orders of the court.
53. This is essentially a suit for damages growing out of the 'failure, refusal and neglect 62. That on September 21, 1914, the Hamburg's said agent at Manila again wrote to
of the Hamburg to safely carry the said merchandise and cargo as in said charter party
the Compagnie informing the said Compagnie of the disposition which had been
and bills of lading provided/ as shown by paragraph XI of the complaint and other
made of the said cargo, and thereafter, on October 1, 1914, received an answer to
allegations of said complaint.
said letters of September 7 and 21, 1914, in which the Compagnie said: 'Up to now
54. That the steamship Sambia, registered in Germany and sailing under the German we have not received any instructions either directly or indirectly to interfere,
flag, and owned by the Hamburg, under and by virtue of a charter party dated June and we shall abstain from doing so without exact orders.'
17, 1914, proceeded to the port of Saigon and was there taking on a cargo belonging
63. That the value of the cargo which is the subject matter of this action, at the time of its
to the Compagnie when on the second day of August, 1914, there were rumors of
loading at Saigon was the invoice price of P266,930, and that at the port of destination
impending war between Germany and France and other nations of Europe.
said cargo would have been worth its said invoice price plus the freight thereon to the
55. That on said second day of August, 1914, the master of the steamship Sambia received respective ports of destination.
an order from the owner of said steamship (Hamburg) to proceed at once to a neutral
64. That the freight on the cargo from Saigon to Dunkirk and Hamburg, according to the
port for refuge, the port of Saigon being a French port; that the Compagnie objected
charter party, amounted to P60,841.32 and no part of the freight on said cargo has
and insisted that the said steamship should load the whole cargo in accordance
been paid by the Compagnie.
with the terms of the charter party; that the master complied and the said steamship
remained in the port of Saigon and the loading was completed during the night of the
65. That no other person, company or entity than the Compagnie, so far as the
evidence shows, has any right, title, interest or claim in and to the said cargo of
third day of August, 1914.
the steamship Sambia, or to the proceed thereof, the subject-matter of this action.
56. That the Compagnie did all within its power to prevent its property from leaving the
port of Saigon, and to that end made application to the judicial authorities at Saigon
66. Hamburg files a cross-complaint and counterclaim and claims that more than
P33,000 have been expended by it in the upkeep and maintenance of the said ship and
for the compulsory detention of the vessel, which application failed, and the Governor
crew since arrival in Manila Bay, and that for this and future expenses of the same
of Saigon refused to issue to the master of said steamship a safe-conduct because he
character the Hamburg claims a lien upon the proceeds of the sale of said cargo
had not been officially notified of the declaration of war.
by way of general average.
57. That on August 4,1914, the said steamship sailed from Saigon, having cleared
officially for Dunkirk and Hamburg, but the master and the agent of said steamship
67. That the Hamburg claims a lien on the proceeds of the sale of said cargo for the
payment of the sum of P18,259.18 to Behn, Meyer & Company as its commissions
also obtained and took along a bill of health for Manila, issued by the United States
for making the sales of said cargo.
consul at Saigon.
68. That the Hamburg claims a lien upon the proceeds of the sale of said cargo for the and therefore the cargo should not in any event be called upon for contribution
freight claimed under the terms of the charter party, amounting to P60,841.32 and for under general average.
(7) That it was the duty of the Hamburg under the charter party to transport said cargo to
the sum of P608.46 for the internal revenue taxes on the sale of said cargo, and for the
Dunkirk and Hamburg in the steamer Sambia; but if for any reason, the transportation
sum of P400 to cover the amount of bonds given by its agent to the customs authorities could not be effected in that vessel within a reasonable time, it was the legal duty of
in Manila to guarantee the production of the consular invoices for said cargo, which the owners of said vessel and of the master thereof to make the shipment in another
consular invoices the Compagnie refuses to produce. vessel. (Carver on Carriage of Goods by Sea, Sections 304, 305.)
69. The lower court ruled in favor of Compagnie and dismissed the cross-complaint of (8) That Behn, Meyer & Company, agent for the Hamburg, having been appointed by
Hamburg (Note: only bold parts are important but the rest are needed to fully this Court as agent of the petitioner Ernest Vietmeyer (master of the
understand the Ruling which partly affirmed, partly reversed, and partly modified this steamship Sambia) and of the said ship in making the discharge and sale of said cargo,
the court is of the opinion that said Behn, Meyer & Company is entitled to a
decision):
reasonable compensation for its services in making the sale of said cargo under the
(1) That it was the duty of the Hamburg, under the terms of the charter party in
authority of the court. And the court is further of the opinion that five per cent (5%)
evidence, to transport the cargo in question from Saigon to Dunkirk and
of the net proceeds of a large cargo of this kind is reasonable compensation for said
Hamburg, via Suez Canal, under steam all the way (unless disabled), or so near
services in making the sale. Therefore, the clerk of this court is hereby directed to
thereunto as she might safely get, and there to deliver the said cargo (always afloat)
retain five per cent (5%) of the amount of said deposit in the court, subject to the
in any safe dock or berth which the charterers or their agents might appoint.
further orders of the court in Civil case No. 12235 for the services of said Behn,
(2) That the freight on the cargo having been made payable on right and true delivery of
Meyer & Company in making the sale.
the cargo at Dunkirk and Hamburg:, and the transportation of the cargo having
(9) That the Hamburg is liable to the Compagnie for the damages caused to
been abandoned by the Hamburg at Manila, no part of the freight was earned
Compagnie in not having delivered the said cargo to Dunkirk and Hamburg, in
without such delivery, in the absence of an agreement that the ship owner should
accordance with the terms of the charter party; and the transportation of the cargo
become entitled to a proportion of the freight on delivery of the cargo in a port
having been abandoned by the Hamburg at Manila, and the Hamburg not having
of refuge. (Carver on Carriage of Goods by Sea, Section 307.)
earned the freight money, the value of the cargo at Saigon must be basis for
(3) That the fear of the owners and master of the seizure or capture of the said
determining the damages suffered by the Compagnie; that since the proceeds of the
steamship Sambia by one of the belligerent powers at war with Germany was
sale of said cargo, after deducting certain expenses of the sale as shown in said Civil
not the result of force majeure and was not a legal or sufficient excuse for having
cause No. 12235, resulted in the sum of P135,766.01 having been deposited in this
fled with a French cargo from Saigon, a French port, to Manila, or for the failure
court, and the court having allowed Behn, Meyer & Company the sum P6,788.30 for
of the Hamburg to transport and deliver the said cargo to the consignees at Dunkirk
their services in making said sale, there now remains subject to the further order of
and Hamburg, or for the failure to tranship the same and cause it to be delivered in
this court the sum of P128,977.71.
accordance with the terms of the charter party.
(10) It having been alleged in the complaint and admitted in the trial of this case that the
(4) That the provision contained in the charter party requiring the ship to make
value of the cargo at Saigon was the invoice price of P266,930 Philippine currency,
delivery of the cargo at Dunkirk and Hamburg, 'or so near thereunto as she may safely
and the court being of the opinion that the value of the cargo in Manila was the price
get' was no legal justification of authority for the deviation of the ship to enter
at which it was sold under the authority of the court, P182,591.46 less the expenses
Manila Bay in order to avoid the seizure or capture of the ship by an enemy of
of the sale and the commissions of the said Behn, Meyer & Company, the court finds
Germany, since that cause was intended only to justify the master of the ship in
that the Compagnie is damaged by the acts of the Hamburg complained of in the
discharging the cargo at some outside anchorage, when by reason of her draft
amount of the difference between the agreed value of the cargo at Saigon (P266,930)
or obstruction to navigation she could not reach the usual wharf or anchorage
and the net proceeds of the sale in Manila (P128,977.71) or the sum of P137,952.29;
of a designated port.
but the court further finds that by paragraph 28 of the charter party the penalty for
(5) That there can be no general average unless there has been a voluntary and
nonperformance of said agreement is proved damages not exceeding the estimated
successful sacrifice of a part of the maritime adventure for the benefit of the
amount of freight, and in this case the estimated amount of freight is P60,841.32.
whole adventure, and for no other purpose; in other words, there must be an
intentional sacrifice of a part of the property on board the vessel for the purpose of (11) Therefore let judgment be entered in this cause in favor of the Compagnie and against
saving the remainder from a common peril, or extraordinary expenditures must be the Hamburg for the said sum of P128,977.71, less any commissions of the clerk of
incurred for the purpose of saving the property in peril. this court free and clear of all liens, claims, or charges asserted by the Hamburg in
(6) That inasmuch as the French cargo was absolutely safe in the French port of Saigon, this cause, with legal interest on said sum from the date of the filing of the complaint
and the deviation of the steamship Sambia from her intended voyage to Dunkirk and in this case until paid; and further, that the Compagnie have and recover from the
Hamburg and her entry into Manila Bay were induced by fear of the capture of the Hamburg in this cause the sum of P60,841.32, as and for actual damages suffered by
vessel by one of the belligerents at war with Germany, the alleged peril which the Compagnie by the Hamburg's breach of the charter party in evidence, with legal
induced the master of said vessel to enter Manila Bay was not common to both interest thereon from the date of the filing of the complaint in this case until paid.
ship and cargo as required by the York-Antwerp Rules as a condition precedent 70. Hamburg appealed, assigning 13 errors (to be discussed below). Compagnie also
to the levying of a general average; that this cargo under the law of nations was assigned 3 errors, claiming that it deserved the full value of the cargo.
not subject to confiscation by any enemy of Germany, and the cargo not having
been imperilled, the expense and loss to the ship and its owners occasioned by ISSUE/s:
the deviation and by taking refuge in Manila Bay during the European war were 6. WoN the Hamburg's deviation of the steamship from the route prescribed in the
not for the benefit of the cargo, but for the sole benefit of the ship and its crew;
charter party was justified - YES. There was a necessity arising out of the presence of
 enemy cruisers on the high seas which compelled the Sambia, once she had left the Necessity for flight
port of Saigon, to take refuge in the port of Manila and to stay there indefinitely 76. We conclude that under the circumstances surrounding the flight of the Sambia from
pending the outcome of the war. Hamburg is not liable for the resultant damages the port of Saigon, her master had no such assurances, under any well-settled and
herein. universally accepted rule of public international law, as to the immunity of his vessel
7. WoN Compagnie was correct in its contention that it was imperative upon the master from seizure by the French authorities, as would justify us in holding that it was his
of Sambia to tranship the cargo on a neutral vessel to one of the ports of destination duty to remain in the port of Saigon in the hope that he would be allowed to sail for
designated in contract (instead of abandoning the the voyage) - NO. The cargo was the port of destination designated in the contract of affreightment with a laissez-
perishable. It would be impractical to secure prompt instructions from the shipper. passer or safe-conduct which would secure the safety of his vessel and cargo en route.
The master elected, after taking the advice of a competent marine surveyor, to sell the 77. It is true that soon after the outbreak of the war, the Republic of France authorized
entire cargo under judicial authority. This appears to be the only course open to him and directed the grant of safe-conducts to enemy merchant vessels in its harbors, under
during the circumstances certain reasonable regulations and restrictions; so that it would appear that had the
8. WoN Compagnie is correct in its contention that Hamburg is responsible for the master of theSambia awaited the issuance of such a safe-conduct, he might have been
deterioration of the cargo incident to its detention in Manila - NO. Having in mind the enabled to comply with the terms of his contract of affreightment. But until such
extraordinary and exceptional conditions existing at that time as a result of the war, action had been taken, the Sambia was exposed to the risk of seizure in the event that
with its interruptions of mail and cable communications, it is error to say that the the French government should decline to conform to the practice; and in the absence
master devoted an unreasonable length of time to the determination of the problem of of any assurance in that regard upon which the master could confidently rely, his duty
the disposition of the cargo with which he was confronted after, his arrival in Manila to his owner and to his vessel's flag justified him in fleeing from the danger of seizure
Bay. On the contrary, he did all that could be required of a prudent man to protect the in the port of an enemy to the absolute security of a neutral port.
interests of the owner of the cargo aboard his vessel. 78. Discussing the exception of “King’s enemies,” Carver says: ‘King’s enemies,’ relates
9. WoN Hamburg's claim for freight should be granted - NO. Under the terms of the to acts done by states or peoples with which the sovereign may be at war, at any time
contract of affreightment, the amount of the freight was made payable on delivery of during the carriage of the goods.
the cargo at the designated port of destination. 1. It does not include robbers on land; but has been said to include pirates, or robbers
10. WoN Hamburg's contention that the court had no jurisdiction because of the provision on the high seas, as being enemies of all nations.
in the charter party for the settlement of disputes for arbitration in London has merit - 2. The shipowner is bound to be careful to avoid the acts of such enemies; but where he
has been so, he is not liable for losses occasioned by them. For example, for the
NO. Hamburg not only appeared and answered in the lower court without objecting
destruction or capture of the goods by enemies' cruisers; or for a delay where the
to the court's jurisdiction, but it also sought affirmative relief. master has properly put into a neutral port for safety. The master is justified in putting
11. WoN Hamburg is entitled for general average – NO. In fleeing from the port of Saigon in, and delaying, where he has a reasonable apprehension of danger from capture.
and taking refuge in Manila Bay the master of the Sambia was not acting for the 3. An express exception of 'King's enemies' relates, at least, to the enemies of the
common safety of the vessel and her cargo. The French cargo was absolutely secure state to which the carrier belongs.
from danger of seizure or confiscation so long as it remained in the port of Saigon, 79. The danger from which the master of the Sambia fled was a real and not merely
and there can be no question that the flight of the Sambia was a measure of precaution an imaginary one as counsel for the shipper contends. Seizure at the hands of an
adopted solely and exclusively for the preservation of the vessel from danger of "enemy of the King," though not inevitable, was a possible outcome of a failure
seizure or capture. to leave the port of Saigon; and we cannot say that under the conditions existing
at the time when the master elected to flee from that port, there were no grounds
RULING: We conclude that so much of the judgment entered in the court below as provides for a "reasonable apprehension of danger" from seizure by the French
for the delivery to the Compagnie in this action of the sum of P128,977.71, the net proceeds of authorities, and therefore no necessity for flight.
the sale of the cargo of rice aboard the Sambia, which has been deposited subject to the order 80. As was said in the case of Australian Steam Nav. Co. vs. Morse: "The word 'necessity'
of the court below, less any commissions to which the clerk of that court may be lawfully when applied to mercantile affairs, where the judgment must in the nature of
entitled at the date of payment, should be affirmed; but that so much of the judgment as things be exercised, cannot, of course, mean an irresistible compelling power.
provides for the recovery of damages in the sum of P60,841.32, should be reversed; and What is meant by it in such cases is the force of circumstances which determine the
further, that so much of the judgment as provides for the payment of legal interest on the net course a man ought to take. Thus, where by the force of circumstances, a man has
proceeds of the sale of the rice deposited in the court below should be modified by the duty cast upon him of taking some action for another, and under that
substituting therefor a provision for the delivery to the Compagnie of any interest allowances obligation adopts a course which, to the judgment of a wise and prudent man, is
which may have accumulated thereon, in any bank or other institution, wherein it may have apparently the best for the interest of the persons for whom he acts in a given
been deposited, at the time when the principal is paid over to the Compagnie. No costs to emergency, it may properly be said of the course so taken that it was in a
either party in this instance. So ordered. mercantile sense necessary to take it."
81. There can be and there is no question as to the necessity, arising out of the
RATIO: presence of enemy cruisers on the high seas which compelled the Sambia, once
(Note: Omitted long discussion relating to grace period and history)
 she had left the port of Saigon, to take refuge in the port of Manila and to stay the duty of the master of the Sambia to tranship his cargo rather than to sell it in
there indefinitely pending the outcome of the war. the port of Manila. On the contrary, we think it sufficiently appears that in
82. We conclude, therefore, that the deviation of the Sambia from the route prescribed adopting the latter course he acted discreetly, prudently and with due regard for
in her charter party, and the subsequent abandonment by the master of the the interests of the cargo owner.
voyage contemplated in the contract of affreightment, must be held to have been 90. Our conclusions in this regard are derived from considerations based upon the
justified by the necessity under which he was placed to elect that course which would evidence of record, the admissions of counsel in argument, and matters of general
remove and preserve the vessel from danger of seizure by the public enemies of the knowledge of which we are authorized to take judicial notice.
flag under which she sailed; and that neither the vessel nor her owners are liable 91. On account of the unavoidable lack of ventilation while the Sambia lay at anchor
for the resultant damages suffered by the owner of the cargo. beneath the rays of a tropical sun, her perishable cargo of rice and ricemeal
began to heat soon after she put into Manila Bay, a part of the cargo being
Duty to Tranship rendered absolutely worthless by heating and through the inroads of weevils so
83. Counsel for the cargo owner (Compagnie) further contend that even if it be held that that it had to be thrown over-board.
the action of the master of the Sambia in fleeing to a port of refuge and abandoning 92. Exhibit B which set out in full in the plaintiff's brief is a certificate prepared by a
the prosecution of the voyage contemplated in the contract of affreightment, was marine surveyor, who having been called upon to examine the cargo aboard
justified or excused by the exigencies of war, it was his imperative duty, nevertheless, the Sambia, reported that it "showed signs of heating and of being infested with
to tranship the cargo on a neutral vessel to one of the ports of destination designated weevils" and recommended, "in the interests of all concerned, that it be discharged
in the contract. and disposed of as soon as possible" and that it "be sold by 'private treaty' in preference
84. We do not think that this contention is sustained by the evidence of record. to 'sale by auction' owing to conditions in the local market."
85. Under ordinary circumstances, it may fairly be presumed in the absence of 93. The risks of heavy, and perhaps total loss, incident to an attempt to tranship this
instructions from a shipper whose goods are found aboard a vessel lying in a port of perishable cargo, were greatly augmented by the possibility, and indeed the
refuge, whose master has been compelled to abandon the attempt to transport the probability, that any vessel used for this purpose would be exposed to unusual
cargo in his own vessel, that the shipper's interests will be consulted by forwarding and protracted delays, as a result of the abnormal conditions prevailing in the
his property to the port designated by him in the contract of affreightment; it would shipping trade after the outbreak of the war, of which we think we may properly
appear therefore that, when practicable, the master is bound to act for the cargo owner take judicial notice.
in that way; 94. And finally, it is a matter of common knowledge in this jurisdiction that rice is
86. BUT: when the condition of the cargo is such as to render it inadvisable to attempt to not exported to Europe from the Philippine Islands, and that freight vessels
tranship, or if there is ground to believe that such will be the case before suitable suitable for the transportation of rice to Europe in bulk do not make a practice
means of transhipment can be secured, the duty clearly rests upon the master to of lying in Manila Bay, unless previous arrangements have been made for their
make such other advantageous disposition of the property of the shipper as coming here under charter; so that in the absence of any evidence to the contrary,
circumstances will permit. we are satisfied that if the master of a German vessel, lying in Manila Bay soon
87. The cargo of the Sambia being a perishable one, and it having proved after the outbreak of the war, could, by any possibility, have secured the services
impracticable to secure prompt instructions from the shipper, the master was of such a vessel, he could not reasonably have hoped to do so without the
confronted with the necessity of electing the course he should pursue, to protect expenditure of considerable time in the effort.
the interests of the shipper whose property had been intrusted to him under a 95. It has been suggested that the danger of loss and damage to this perishable cargo might
contract of affreightment which he found himself unable to execute upon his own have been averted had it been transhipped immediately upon the arrival of
vessel. the Sambia in Manila Bay and before it began to heat and deteriorate in the hold of
88. He elected, after taking the advice of a competent marine surveyor, to sell the that vessel.
entire cargo under judicial authority, and to that end followed substantially the 96. But aside from any question as to the impracticability of securing a suitable vessel for
proceedings prescribed in such cases in section II, chapter III of the Commercial that purpose immediately after the arrival of the Sambia in Manila Bay, it must not be
Code; and we are of opinion that not only is there nothing in the record which would forgotten that the act of the "King's enemy" which justified and excused her flight
sustain a finding that in so doing he failed to exercise a sound discretion in the from Saigon, necessitated, and therefore justified and excused the retention of the
performance of the duty resting upon him to protect the interests of the cargo owner, cargo aboard the vessel by the master for such time as might be reasonably necessary
but that on the whole record it affirmatively appears that this was the only course to ascertain the facts upon which he could intelligently decide upon the proper course
open to him under all the circumstances existing at the time when he adopted it. to be pursued thereafter; and that the deterioration of the cargo set in as soon as the
89. No direct evidence appears to have been submitted by either party as to whether vessel came to anchor and adequate ventilation could not longer be provided. It
it would have been practicable to secure a suitable vessel upon which to tranship follows that the question which confronted him when the time had arrived for the
the cargo. This may have been, and doubtless was, because the impracticability of an making of his decision as to the disposition which should be made of the cargo aboard
attempt to tranship was tacitly conceded in the court below. But however this may his vessel was whether the interests of the shipper would be consulted by the
be, it is clear that the record will not sustain an affirmative finding that it was transhipment of a perishable cargo of ricemeal that had already begun to heat and to
 deteriorate, or by its sale on the local market for the best price he could get and we Bay, (August 8, 1914) and another a week later, advising him of the situation; that
are of opinion that it sufficiently appears that under all the circumstances his duty was these cables were not delivered presumably because of the interruption of cable
to sell rather than to tranship. communications following the outbreak of war; that later, two letters were forwarded
but remained unanswered until after the master had sought and secured judicial
Liability for deterioration authority to sell the cargo the answer when it was received being a flat refusal on the
97. Counsel for the cargo owners (Compagnie) further contend that the shipowner should part of the Saigon representative of the cargo owners to give any instructions or
be held responsible, at all events, for the deterioration in the value of the cargo, assume any responsibility;
incident to its detention on board the vessel from the date of its arrival in Manila until 101. That on September 4, 1914, the master of the Sambia had a survey made of the cargo,
it was sold. by a qualified marine surveyor, who reported that it "showed signs of heating and
98. But it is clear that the master could not be required to act on the very day of his being infested with weevils," and recommended that it be sold "in the interests of all
arrival; or before he had a reasonable opportunity to ascertain whether he could concerned;" that a copy of the marine surveyor's report was immediately mailed to the
hope to carry out his contract and earn his freight; and that he should not be Saigon representative of the cargo owners;
held responsible for a reasonable delay incident to an effort to ascertain the 102. that on September 10, 1914, the master, not having been able to get into
wishes of the freighter, and upon failure to secure prompt advices, to decide for communication with the cargo owners or their representative in Saigon, sought
himself as to the course which he should adopt to secure the interests of the and secured judicial authority to sell the cargo; and that it was sold under
absent owner of the property aboard his vessel. judicial authority granted in accordance with the provisions of local law made
99. Relevant provisions of the Carver’s Carriage by the Sea: and provided in such cases.
1. “The master is entitled to delay for such a period as may be reasonable under 103. It will be seen that thirty-three days elapsed from the date of the arrival of
the circumstances, before deciding on the course he will adopt. He may claim a the Sambia in Manila Bay, to the date of the master's application for judicial authority
fair opportunity of carrying out the contract, and earning the freight, whether to sell the cargo. But having in mind the extraordinary and exceptional conditions
by repairing or transhipping. Should the repair of the ship be undertaken, it must
existing at that time as a result of the war, with its interruptions of mail and cable
be proceeded with diligently; and if so done, the freighter will have no ground of
complaint, although the consequent delay be a long one, unless, indeed, the cargo communications, its disruption of the markets throughout the world, its
is perishable, and likely to be injured by the delay. Where that is the case, it development of questions as to whether food supplies should or should not be
ought to be forwarded, or sold, or given up, as the case may be, without waiting declared contraband, and its threatening aspects with relation to shipping and
for repairs." (Sec. 309.) commercial enterprises of all kinds throughout the world, we are unable to say
2. "A shipowner, or shipmaster (if communication with the shipowner is that the master devoted an unreasonable length of time to the determination of
impossible), will be allowed a reasonable time in which to decide what course he the problem of the disposition of the cargo with which he was confronted after,
will adopt in such cases as those under discussion; time must be allowed to him,to his arrival in Manila Bay.
ascertain the facts, and to balance the conflicting interests involved, of shipowner,
104. On the contrary, we are of opinion that he proceeded with all reasonable
cargo owner, underwriters on ship, cargo and freight. But once that time has
elapsed, he is bound to act promptly according as he has elected either to repair, dispatch, and did all that could be required of a prudent man to protect the
or abandon the voyage, or tranship. If he delays, and owing to that delay a interests of the owner of the cargo aboard his vessel; so that any losses which
perishable cargo suffers damage, the shipowner will be liable for that damage; resulted from the detention of the cargo aboard the Sambia must be attributed
he cannot escape that obligation by pleading the absence of definite instructions from to the act of the "enemies of the king," which compelled the Sambia to flee to a
the owners of the cargo or their underwriters, since he has control of the cargo and is port of refuge, and made necessary the retention of the cargo aboard the vessel
entitled to elect." (Sec. 304a.) at anchor under a tropical sun, and without proper ventilation, until it could be
3. "The other condition of the master's authority to sell is that the owners of the ascertained that the interests of the absent owner would be consulted by the sale
cargo must have been communicated with and their instructions taken before
of this perishable cargo in the local market.
selling, if practicable. Whether that was so must be judged having regard to all the
circumstances of the particular case. The master is not to delay for instructions where
delay would be clearly imprudent. But if there is a fair expectation of obtaining Jurisdiction of the Court
directions, either from the owners of the goods, or from agents known by the master 105. We come now to consider the various contentions of counsel for the shipowner
to have authority to deal with the goods, within such a time as would not be (Hamburg) denying the right of the owners of the cargo to a judgment for all, or some
imprudent, the master must make every reasonable endeavor to get those directions; specified part, of the proceeds of the sale of the rice.
and his authority to sell does not arise until he has failed to get them. 106. The contention that the court below was without jurisdiction of the subject-
4. "Should the master fail to seek for instructions when he might get them, or should he matter by reason of the provision in the charter party for the settlement of
act against the instructions he receives, any sale or hypothecation of the cargo he may disputes by a reference to arbitration in London, may be disposed of without
make under those circumstances is wrongful and void." (Sec. 299.)
extended discussion. This objection to the jurisdiction of the court appears for the
100. It appears that two cablegrams were dispatched by the local agent of the shipowner
first time in defendant's brief on appeal.
and of the master, to the duly authorized representative of the cargo owners
107. In the court below defendant Hamburg not only appeared and answered without
(Compagnie) in Saigon, one on the very day of the arrival of the Sambia in Manila
objecting to the court's Jurisdiction, but sought affirmative relief; and it is very,
 clear that defendant cannot be permitted to submit the issues raised by the
pleadings for adjudication, without objection, and then, when unsuccessful, General Average
assail the court's jurisdiction in reliance upon a stipulation in the charter party 113. The claim of the shipowner (Hamburg) for general average cannot be sustained
which the parties were at entire liberty to waive if they so desired. under the provisions of the York-Antwerp Rules of 1890, by reference to which, it
108. We do not stop therefore to rule upon the contention of opposing counsel, that a was expressly stipulated in the charter party, all such questions should be settled.
contractual stipulation for a general arbitration cannot be invoked to oust our 114. Rules X and XI, which treat of "Expenses at Port of Refuge, etc.," and "Wages and
courts of their jurisdiction, under the doctrine announced in the cases of Wahl Maintenance of Crew in Port of Refuge, etc," provide for general average "When a
and Wahl vs. Donaldson, Sims & Co. (2 Phil. Rep., 301, 303), and Cordoba vs. ship shall have entered a port or place of refuge, or shall have returned to her port or
Conde (2 Phil. Rep., 445, 447); and that this doctrine should be applied in the place of loading, in consequence of accident, sacrifice, or other extraordinary
case at bar, notwithstanding the fact that the contract was executed in England, in the circumstances which render that necessary for the common safety;" and an
absence of averment and proof that under the law of England compliance with, or an examination of the entire body of these rules discloses that general average is
offer to comply with such a stipulation constitutes a condition precedent to the never allowed thereunder unless the loss or damage sought to be made good as
institution of judicial proceeding for the enforcement of the contract. general average has been incurred for the "common safety."
109. Note: the case didn’t say what the doctrine was in Wahl & Wahl and Cordoba. But 115. It is very clear that in fleeing from the port of Saigon and taking refuge in Manila
based on a quick google search of Wahl: The Court held therein that the arbitration Bay the master of the Sambia was not acting for the common safety of the vessel
clause was void because it referred all matters (in contrast to just specific damages) and her cargo. The French cargo was absolutely secure from danger of seizure
to the arbitrators alone. This is void for being against public policy because it or confiscation so long as it remained in the port of Saigon, and there can be no
attempts to prevent a right of action from accruing at all. question that the flight of the Sambia was a measure of precaution adopted solely
and exclusively for the preservation of the vessel from danger of seizure or
Freight capture.
110. The claim advanced on behalf of the shipowner for freight is wholly without merit. 116. Rule 18 of the York-Antwerp Rules is as follows: "Except as provided in the foregoing
Under the terms of the contract of affreightment, the amount of the freight was rules, the adjustment shall be drawn up in accordance with the law and practice that
made payable on delivery of the cargo at the designated port of destination. It is would have governed the adjustment had the contract of affreightment not contained
clear then, that under the terms of that instrument freight never became payable. the clause to pay general average according to these rules."
111. Carrying the cargo from Saigon to Manila was not even a partial performance 117. If then, any doubt could properly arise as to the meaning and effect of the words
of a contract to carry it from Saigon to Europe; and even if it could be treated as "common safety" as used in this body of rules, we would be justified in resolving it in
such, the shipowner would have no claim for freight, in the absence of any accordance with settled principles of maritime law; and an examination of the
agreement, express or implied, to make payment for a partial performance of the authorities discloses a substantial unanimity of opinion as to the general doctrine
contract. which provides that claims for contribution in general average must be supported
112. The citation from Carver (Section 307) referred to in the decision of the trial court is by proof that sacrifices on account of which such claims are submitted were made
as follows: to avert a common imminent peril, and that extraordinary expenses for which
1. “Should the master relinquish the attempt either to carry on the goods in his own ship reimbursement is sought, were incurred for the joint benefit of ship and cargo.
or to send them to their destination in another ship, he will thereby wholly abandon 118. In the case of The Star of Hope vs. Annan, Justice Clifford, speaking for the court
any claim for freight in respect to them, unless it has been made payable in advance, said:
or irrespective of delivery. Where freight is only payable on delivery, no part is 1. Three things must concur in order to constitute a valid claim for general average
earned until it is earned completely. So that whether the abandonment of the contribution;
voyage be due to inability, or prevention of the ship, or to the necessity of selling 2. First, there must be a common danger to which the ship, cargo and crew were all
the goods, either to raise funds for the ship's repairs or in their owner's interest, exposed, and that danger must be imminent and apparently inevitable, except by
the shipowner loses the whole freight.” incurring a loss of a portion of the associated interests to save the remainder.
2. “On the other hand, if the cargo be accepted at the port of refuge under an agreement 3. Second, there must be the voluntary sacrifice of a part for the benefit of the whole,
that delivery there shall be treated as a performance by the shipowner of his contract; as, for example, a voluntary jettison or casting away of some portion of the associated
or if the owner of the goods, by any act or default, prevents the shipowner from interests for the purpose of avoiding the common peril, or a voluntary transfer of the
carrying them on to their destination, the whole of the freight becomes at once common peril from the whole to a particular portion of those interests.
payable. 4. Third, the attempt so made to avoid the common peril to which all those interests
3. "Also sometimes the shipowner becomes entitled, by agreement, on delivery at a port were exposed must be to some practical extent successful, for if nothing is saved there
of refuge, to freight in proportion to the part of the voyage which has been cannot be any such contribution in any case.
accomplished. This subject will be discussed more fully hereafter. Here it is enough 119. In the case of Ralli vs. Troop (157 U. S., 418), Justice Gray, delivering the opinion for
to say that no agreement of this kind can arise, by implication, unless the cargo owner
the court said:
has consented to accept the goods under circumstances which left him an option to
1. The law of general average is part of the maritime law, and not of the municipal law,
have them carried on to their destination by the shipowner, in his own or some other
and applies to maritime adventures only.
vessel.
 2. To constitute a general average loss, there must be a voluntary sacrifice of part of the
maritime adventure, for the purpose, and with the effect of saving the other parts of
the adventure from an imminent peril impending over the whole.
3. The interests so saved must be the sole object of the sacrifice, and those interests only
can be required to contribute to the loss. The safety of property not included in the
common adventure can neither be an object of the sacrifice, nor a ground of
contribution."
120. What has been said disposes of all the real issues raised on this appeal, except the
contentions of the parties as to the effect which should be given the so-called penal
clause of the charter party which our rulings on plaintiff's prayer for damages make it
unnecessary for us to consider or decide.
121. Note: Read the Ruling because the decision was partly affirmed, partly reversed, and
partly modified.
122. Counsel for Compagnie filed a motion for rehearing but was denied.
 KING MAU WU v. SYCIP (Salve) the Philippines and was to be paid 2 1/2 per cent on the total actual sale price of
April 23, 1954 | Padilla, J. | Contracts sales obtained through his efforts in addition thereto 50 per cent of the difference
between the authorized sale price and the actual sale price.
PETITIONER: King Mau Wu 4. Court rendered judgment as prayed for in the complaint (in favor of King Mau
RESPONDENTS: Francisco Sycip Wu). A motion for reconsideration was denied. A motion for a new trial was filed,
supported by newly discovered evidence. The motion for new trial was denied.
SUMMARY: King Mau Wu, agent of Sycip, seeks to collect his commission 5. King Mau Wu claims that for that sale he is entitled under the agency contract to
arising out of a shipment of 1,000 tons of coconut oil emulsion to Jas. Maxwell a commission of 2 1/2 per cent on the total actual sale price of 1,000 tons of
Fassett. Under an agency agreement executed in New York, King Mau Wu was coconut oil emulsion, part of which has been paid by Sycip, there being only a
made the exclusive agent of the Sycip in the sale of coconut oil and its derivatives balance of $3,794.94 for commission due and unpaid on the last shipment of
outside the Philippines and was to be paid 2 1/2 per cent on the total actual sale 379.494 tons and 50 per cent of the difference between the authorized sale price
price of sales obtained through his efforts in addition thereto 50 per cent of the of $350 per ton and the actual selling price of $400 per ton, which amounts to
difference between the authorized sale price and the actual sale price. Sycip $25,000 due and unpaid, and $746.52 for interest from 14 October 1947, the date
contends that the transaction for the sale of 1,000 metric tons of coconut oil of the written demand.
emulsion was not covered by the agency contract of 22 November 1946 because it 6. Sycip contends that the transaction for the sale of 1,000 metric tons of coconut oil
was agreed upon on 16 October 1946 (earlier than the alleged agency contract); that emulsion was not covered by the agency contract of 22 November 1946 because
it was an independent and separate transaction for which King Mau Wu has been it was agreed upon on 16 October 1946 (earlier than the alleged agency contract);
duly compensated. WoN CFI (now, RTC) has jurisdiction over a case regarding a that it was an independent and separate transaction for which King Mau Wu has
contract executed in New York – YES, because it is only a question of enforcing an been duly compensated.
obligation created by or arising from contract; and unless the enforcement of the 7. The letter upon which Sycip relies for his defense does not stipulate on the
contract be against public policy of the forum, it must be enforced. A non-resident commission to be paid to King Mau Wu as agent, and yet if he paid King Mau
may sue a resident in the courts of this country where the defendant may be Wu a 2 1/2 per cent commission on the first three coconut oil emulsion shipments,
summoned and his property leviable upon execution in the case of a favorable, final there is no reason why he should not pay him the same commission on the last
and executory judgment. It is a personal action for the collection of a sum of money shipment amounting to $3,794.94.
which the Courts of First Instance have jurisdiction to try and decide. There is no
conflict of laws involved in this case. WoN King Mau Wu is entitled to his ISSUE/s:
commission – YES, because Sycip was not able to prove that the sale was a 1. WoN CFI (now, RTC) has jurisdiction over a case regarding a contract executed
separate transaction. in New York – YES, because it is only a question of enforcing an obligation
created by or arising from contract; and unless the enforcement of the contract be
DOCTRINE: There is no conflict of laws involved in the case, because it is only a against public policy of the forum, it must be enforced.
question of enforcing an obligation created by or arising from contract; and unless 2. WoN King Mau Wu is entitled to his commission – YES, because Sycip was not
the enforcement of the contract be against public policy of the forum, it must be able to prove that the sale was a separate transaction.
enforced.
RULING: As thus modified the judgment appealed from is affirmed, with costs
against the appellant.
FACTS:
RATIO:
1. This is an action to collect P59,082.92, together with lawful interests from 14
First Issue
October 1947, the date of the written demand for payment, and costs.
123. The contention that as the contract was executed in New York, the Court of First
2. The claim arises out of a shipment of 1,000 tons of coconut oil emulsion sold by
Instance of Manila has no jurisdiction over this case, is without merit, because a
King Mau Wu, as agent of Sycip, to Jas. Maxwell Fassett, who in turn assigned it
non-resident may sue a resident in the courts of this country where the defendant
to Fortrade Corporation.
may be summoned and his property leviable upon execution in the case of a
3. Under an agency agreement executed in New York, King Mau Wu was made the
favorable, final and executory judgment.
exclusive agent of the Sycip in the sale of coconut oil and its derivatives outside
124. It is a personal action for the collection of a sum of money which the Courts of
 First Instance have jurisdiction to try and decide.
125. There is no conflict of laws involved in the case, because it is only a question of
enforcing an obligation created by or arising from contract; and unless the
enforcement of the contract be against public policy of the forum, it must be
enforced.

Second Issue
1. King Mau Wu is entitled to collect P7,589.88 for commission and P50,000 for
one-half of the overprice, or a total of P57,589.88, lawful interests thereon from
the date of the filing of the complaint, and costs in both instances.
2. There can be no doubt that the sale of 1,000 metric tons of coconut oil emulsion
was not a separate and independent contract from that of the agency agreement
on 7 November and accepted on 22 November 1946 by Sycip, because in a letter
dated 2 January 1947 addressed to King Mau Wu, referring to the transaction of
1,000 metric tons of coconut oil emulsion, Sycip says —
3. “I am doing everything possible to fulfill these 1,000 tons of emulsion, and until
such time that we completed this order I do not feel it very sensible on my part to
accept any more orders. I want to prove to Fortrade, yourself and other people that
we deliver our goods. Regarding your commission, it is understood to be 2 1/2
per cent of all prices quoted by me plus 50-50 on over price.” (Schedule B.)
4. In another letter dated 16 January 1957 to King Mau Wu, speaking of the same
transaction, Sycip says —
5. “As per our understanding when I was in the States the overprice is subject to any
increase in the cost of production. I am not trying to make things difficult for you
and I shall give you your 2 1/2 per cent commission plus our overprice provided
you can give me substantial order in order for me to amortize my loss on this first
deal. Unless such could be arranged I shall remit to you for the present your
commission upon collection from the bank.” (Schedule C.)
6. In a telegram sent by Sycip to King Mau Wu the former says —
7. “Your money pending stop understand you authorized some local attorneys and
my relatives to intervene your behalf.” (Schedule D.)
8. Sycip’s claim that the agreement for the sale of the 1,000 metric tons of coconut
oil emulsion was agreed upon in a document, referring to the letter of 16 October
1946, is again disproved by his letter dated 2 December 1946 to Fortrade
Corporation where he says:
“The purpose of this letter is to confirm in final form the oral agreement which
we have heretofore reached, as between ourselves, during the course of various
conversations between us and our respective representatives upon the subject
matter of this letter. It is understood that I am to sell to you, and you are to
purchase from me, 1,000 tons of coconut oil soap emulsion at a price of $400.
per metric ton, i.e. 2,204.6 pounds, F.O.B. shipboard, Manila, P.I.” (Exhibit S,
Special. Emphasis supplied.)
 016 SHEWARAM v. PHILIPPINE AIRLINES (APASAN) costing P373.00, was due to the negligence of the employees of PAL, it is clear
Month, date, year | Ponencia, J. | Contract; Common Carrier; limitation of liability that Shewaram should be held liable for the payment of said loss
clause
Second, WoN the condition at the back of PAL’s ticket is valid – No. The
PETITIONER: Permanand Shewaram pecuniary liability of a common carrier may, by contract, be limited to a fixed
RESPONDENTS: Philippine Airlines Inc. amount. It is required, however, that the contract must be "reasonable and just
under the circumstances and has been fairly and freely agreed upon." Thus, it
SUMMARY: Shewaram was a passenger of PAL on a flight from Zamboanga must first complied with the condition stated in Art. 1750 of the CC. In the present
City bound for Manila. On the day of the said flight (Nov. 23, 1959), Shewaram case, it is contended by PAL that its liability should be limited to the amount
checked in 3 pieces of baggages – a suitcase and two other pieces. However, the stated in the conditions of carriage printed at the back of the plane ticket stub
suitcase was mistagged by PAL’s personnel in Zamboanga City as I.G.N (for which was issued to Shewaram (see ratio no. 3), which conditions are embodied
Iligan) instead of MNL (for Manila). Upon arrival in Manila, his suitcase did not in Domestic Tariff Regulations No. 2 which was filed with the Civil Aeronautics
arrive with his flight since it was sent to Iligan. So Shewaram made a claim with Board. However, the Court believes that the requirements of said article have not
PAL’s personnel in Manila Airport. In the meantime, another suitcase (similar to been met. It cannot be said that Shewaram had actually entered into a contract
Shewaram’s, but later it was discovered that it was owned by a certain Mr. Del with PAL, embodying the conditions as printed at the back of the ticket stub that
Rosario)) was offered to Shewaram by PAL, claiming that it was the one owned was issued by PAL to Shewaram. The fact that those conditions are printed at the
by Shewaram. But he refused to accept it since upon his inspection, he found that back of the ticket stub in letters so small that they are hard to read would not
his items such as the National transistor 7 and Rollflex camera were not inside warrant the presumption that Shewaram was aware of those conditions such that
the suitcase. Later, PAL found out that his suitcase was in Iligan so the suitcase he had "fairly and freely agreed" to those conditions. Moreover, in the case
was sent to Manila and it arrived the day after the said flight (Nov. 24, 1959). of Ysmael and Co. vs. Barreto, cited by the trial court in support of its decision,
However, upon arrival, Shewaram was informed that his national transistor and this Court had laid down the rule that the carrier cannot limit its liability for injury
rollflex camera were missing so he made a demand against PAL for the said items to or loss of goods shipped where such injury or loss was caused by its own
or the value of them but it was unheeded. Shewaram filed a complaint against negligence.
PAL. The MTC ruled in favor of Shewaram. It ruled that Exhibit "1" of PAL
would show that the baggage that was offered to Shewaram (Mr. Del Rosario’s DOCTRINE:
suitcase) as his own was opened and he denied ownership of the contents of the (1) The pecuniary liability of a common carrier may, by contract, be limited
baggage. This proves the fact that baggage may and could be opened without the to a fixed amount. It is required, however, that the contract must be
necessary authorization and presence of its owner (Del Rosario), applied too, to "reasonable and just under the circumstances and has been fairly and
the suitcase of Shewaram which was mis-sent to Iligan City because of freely agreed upon.”
mistagging. The possibility of what happened in the baggage of Mr. Del Rosario (2) The carrier cannot limit its liability for injury to or loss of goods shipped
at the Manila Airport in his absence could have also happened to Shewaram’s where such injury or loss was caused by its own negligence.
suitcase at Iligan City in his absence. Hence, the Court believes that these two
items were really in Shewaram's suitcase and PAL should be held liable for the
same by virtue of its contract of carriage. The RTC affirmed. Hence this appeal.
FACTS:
1. Parmanand Shewaram (Shewaram), the plaintiff herein, was on November
ISSUES:
First, WoN PAL is liable for breach of contract of carriage – Yes. There is no 23, 1959, a paying passenger with ticket No. 4-30976, on PAL’s aircraft flight
question that PAL is a common carrier. As such, PAL, from the nature of its No. 976/910 from Zamboanga City bound for Manila; PAL is a common
business and for reasons of public policy, is bound to observe extraordinary carrier engaged in airline transportation in the Philippines, offering its
diligence in the vigilance over the goods and for the safety of the passengers services to the public to carry and transport passengers and cargoes from and
transported by it according to the circumstances of each case. It having been to different points in the Philippines.
shown that the loss of the transistor radio and the camera of the Shewaram, 2. On the day of the said flight, Shewaram checked in three (3) pieces of
baggages — a suitcase and two (2) other pieces; however the suitcase was
 mistagged by PAL's personnel in Zamboanga City, as I.G.N. (for Iligan) with PAL had presented evidence that it had authority to open passengers' baggage
claim check No. B-3883, instead of MNL (for Manila). to verify and find its ownership or identity.
3. When Shewaram arrived in Manila on the same day, his suitcase did not 8. Exhibit "1" of PAL would show that the baggage that was offered to
arrive with his flight because it was sent to Iligan. So, he made a claim with Shewaram as his own was opened and he denied ownership of the contents
PAL's personnel in Manila airport. In the meantime, another suitcase similar of the baggage. This proves the fact that baggage may and could be opened
to Shewaram, which was the only baggage left for that flight, the rest having without the necessary authorization and presence of its owner (Del Rosario),
been claimed and released to the other passengers of said flight, was given to applied too, to the suitcase of Shewaram which was mis-sent to Iligan City
him to take delivery but he did not and refused to take delivery of the same because of mistagging. The possibility of what happened in the baggage of
on the ground that it was not his, alleging that all his clothes were white and Mr. Del Rosario at the Manila Airport in his absence could have also
the National transistor 7 and a Rollflex camera were not found inside the happened to Shewaram’s suitcase at Iligan City in his absence. Hence, the
suitcase, and moreover, it contained a pistol which he did not have nor placed Court believes that these two items were really in Shewaram's suitcase and
inside his suitcase. PAL should be held liable for the same by virtue of its contract of carriage.
4. After inquiries made by PAL's personnel in Manila from different airports 9. Thus, after trial, the municipal court of Zamboanga City rendered judgment
where the suitcase in question must have been sent, it was found to have ordering the PAL to pay Shewaram P373.00 as actual damages, P100.00 as
reached Iligan and the station agent of the PAL in Iligan caused the same to exemplary damages, P150.00 as attorney's fees, and the costs of the action.
be sent to Manila for delivery to Shewaram and such suitcase arrived in 10. PAL appealed to the Court of First Instance (RTC) of Zamboanga City. After
Manila airport on November 24, 1959. It was also found out that the suitcase hearing the Court of First Instance of Zamboanga City modified the judgment
shown to and given to Shewaram for delivery which he refused to take of the inferior court by ordering the PAL to pay the appellee only the sum of
delivery belonged to a certain Del Rosario who was bound for Iligan in the P373.00 as actual damages, with legal interest from May 6, 1960 and the sum
same flight with Shewaram. of P150.00 as attorney's fees, eliminating the award of exemplary damages.
5. When Shewaram's suitcase arrived in Manila as stated above on November 11. Hence, this appeal by PAL.
24, 1959, he was informed by Mr. Tomas Blanco, Jr., the acting station agent
of the Manila airport of the arrival of his suitcase but without his Transistor ISSUE:
1. WoN PAL is liable for breach of contract of carriage – YES, it was proven
Radio 7 and the Rollflex Camera. So Shewaram made demand for these two
that the lost items of Shewaram was due to negligence of PAL’s employees.
(2) items or for the value thereof but the same was not complied with by PAL. 2. WoN the condition at the back of the PAL ticket is valid – NO, the fact that
6. It is admitted by PAL that there was mistake in tagging the suitcase of those conditions are printed at the back of the ticket stub in letters so small
Shewaram as IGN. The tampering of the suitcase is more apparent on that they are hard to read would not warrant the presumption that Shewaram
November 24, 1959, when the suitcase arrived in Manila, PAL's personnel was aware of those conditions such that he had "fairly and freely agreed" to
could open the same in spite of the fact that Shewaram had it under key when those conditions.
he delivered the suitcase to PAL's personnel in Zamboanga City. Moreover,
RULING: In view of the foregoing, the decision appealed from is affirmed, with costs
it was established during the hearing that there was space in the suitcase
against PAL.
where the two items in question could have been placed.
7. It was also shown that as early as November 24, 1959, when Shewaram was RATIO:
notified by phone of the arrival of the suitcase, he asked that check of the PAL AS A COMMONCARRIER HAS DUTY TO OBSERVE EXTRAORDINARY
things inside his suitcase be made and PAL admitted that the two items could DILIGENCE
not be found inside the suitcase. There was no evidence on record sufficient 1. It is clear from the decision of the trial court that said court had found that the
to show that Shewaram's suitcase was never opened during the time it was suitcase of Shewaram was tampered, and the transistor radio and the camera
placed in PAL's possession and prior to its recovery by Shewaram. However, contained therein were lost, and that the loss of those articles was due to the
negligence of the employees of PAL. The evidence shows that the transistor
 radio cost P197.00 and the camera cost P176.00, so the total value of the two 6. In accordance with the above-quoted provision of Article 1750 of the New
articles was P373.00. Civil Code, the pecuniary liability of a common carrier may, by contract,
2. There is no question that PAL is a common carrier. As such, PAL, from the be limited to a fixed amount. It is required, however, that the contract
nature of its business and for reasons of public policy, is bound to observe
must be "reasonable and just under the circumstances and has been
extraordinary diligence in the vigilance over the goods and for the safety of
the passengers transported by it according to the circumstances of each case. fairly and freely agreed upon."
It having been shown that the loss of the transistor radio and the camera of 7. The requirements provided in Article 1750 of the New Civil Code must
Shewaram, costing P373.00, was due to the negligence of the employees of be complied with before a common carrier can claim a limitation of its
PAL, it is clear that Shewaram should be held liable for the payment of said pecuniary liability in case of loss, destruction or deterioration of the
loss. goods it has undertaken to transport.
8. In the present case, the Court believes that the requirements of said article
CONTRACT FIXING LIABILITY OF COMMON CARRIERS GOVERNED BY
have not been met. It cannot be said that Shewaram had actually entered
ART. 1750 OF CC
3. It is, however, contended by PAL that its liability should be limited to the into a contract with PAL, embodying the conditions as printed at the
amount stated in the conditions of carriage printed at the back of the plane back of the ticket stub that was issued by PAL to Shewaram. The fact
ticket stub which was issued to Shewaram, which conditions are embodied in that those conditions are printed at the back of the ticket stub in letters
Domestic Tariff Regulations No. 2 which was filed with the Civil so small that they are hard to read would not warrant the presumption
Aeronautics Board. One of those conditions, which is pertinent to the issue that Shewaram was aware of those conditions such that he had "fairly
raised by the appellant in this case provides as follows: and freely agreed" to those conditions.
The liability, if any, for loss or damage to checked baggage or for delay in the 9. The trial court has categorically stated in its decision that the "Defendant
delivery thereof is limited to its value and, unless the passenger declares in advance (PAL) admits that passengers do not sign the ticket, much less did
a higher valuation and pay an additional charge therefor, the value shall be plaintiff (Shewaram) herein sign his ticket when he made the flight on
conclusively deemed not to exceed P100.00 for each ticket. November 23, 1959." We hold, therefore, that Shewaram is not, and cannot
4. PAL maintains that in view of the failure of Shewaram to declare a higher be, bound by the conditions of carriage found at the back of the ticket stub
value for his luggage, and pay the freight on the basis of said declared value issued to him when he made the flight on PAL's plane on November 23, 1959.
when he checked such luggage at the Zamboanga City airport, pursuant to 10. The liability of PAL in the present case should be governed by the provisions
the abovequoted condition, he cannot demand payment from PAL of an of Articles 173484 and 173585 of the New Civil Code. It having been clearly
amount in excess of P100.00. found by the trial court that the transistor radio and the camera of the
5. The law that may be invoked, in this connection is Article 1750 of the New Shewaram were lost as a result of the negligence of PAL as a common carrier,
Civil Code which provides as follows: the liability of the latter is clear — it must pay Shewaram the value of those
A contract fixing the sum that may be recovered by the owner or shipper for the two articles.
loss, destruction, or deterioration of the goods is valid, if it is reasonable and just 11. In the case of Ysmael and Co. vs. Barreto, cited by the trial court in support
under the circumstances, and has been fairly and freely agreed upon. of its decision, this Court had laid down the rule that the carrier cannot limit

84 85
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the
goods, unless the same is due to any of the following causes only: article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; been at fault or to have acted negligently, unless they prove that they observed extraordinary
(2) Act of the public enemy in war, whether international or civil; diligence as required in Article 1733.
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.
its liability for injury to or loss of goods shipped where such injury or misfeasance, or that of its servants; and it has been specifically
loss was caused by its own negligence. Corpus Juris, volume 10, p. 154, decided in many cases that no contract limitation will relieve the
says: carrier from responsibility for the negligence, unskillfulness, or
a. "Par. 194, 6. Reasonableness of Limitations. — The validity of carelessness of its employer." (Cited in Ysmael and Co. vs. Barreto,
stipulations limiting the carrier's liability is to be determined by their 51 Phil. 90, 98, 99).
reasonableness and their conformity to the sound public policy, in
accordance with which the obligations of the carrier to the public are
settled. It cannot lawfully stipulate for exemption from liability,
unless such exemption is just and reasonable, and unless the contract
is freely and fairly made. No contractual limitation is reasonable
which is subversive of public policy.
b. "Par. 195. 7. What Limitations of Liability Permissible. — a.
Negligence — (1) Rule in America — (a) In Absence of Organic or
Statutory Provisions Regulating Subject — aa. Majority Rule. — In
the absence of statute, it is settled by the weight of authority in the
United States, that whatever limitations against its common-law
liability are permissible to a carrier, it cannot limit its liability for
injury to or loss of goods shipped, where such injury or loss is
caused by its own negligence. This is the common law doctrine and
it makes no difference that there is no statutory prohibition against
contracts of this character.
c. "Par. 196. bb. Considerations on which Rule Based. — The rule, it
is said, rests on considerations of public policy. The undertaking is
to carry the goods, and to relieve the shipper from all liability for
loss or damage arising from negligence in performing its contract is
to ignore the contract itself. The natural effect of a limitation of
liability against negligence is to induce want of care on the part of
the carrier in the performance of its duty. The shipper and the
common carrier are not on equal terms; the shipper must send his
freight by the common carrier, or not at all; he is therefore entirely
at the mercy of the carrier unless protected by the higher power of
the law against being forced into contracts limiting the carrier's
liability. Such contracts are wanting in the element of voluntary
assent.
d. "Par. 197. cc. Application and Extent of Rule — (aa) Negligence of
Servants. — The rule prohibiting limitation of liability for
negligence is often stated as a prohibition of any contract relieving
the carrier from loss or damage caused by its own negligence or
 017 ONG YIU v. CA(Arcenas) (immediate and swift relay of messages of the missing luggage report among
June 29, 1979 | Melencio-Herrera, J. | Contracts BUTUAN, CEBU and MANILA – see ratio 4-7). The fact that the message was
sent at 3:59 P.M. from Manila and completely relayed to Mactan at 4:00 P.M., or
PETITIONER/S: Agustino B. Ong Yiu within one minute, made the message appear spurious was hend untenable by SC.
RESPONDENTS: CA and Philippine Air Lines, Inc (PAL) A radio message of about 50 words can be completely transmitted in even less than
one minute, depending upon atmospheric conditions. Even if the message was sent
SUMMARY: Atty. Ong Yiu was bound for Butuan City from Mactan Cebu on from Manila or other distant places, the message can be received within a minute
board a PAL flight on August 26 since he was due to attend scheduled trials (civil + that is a scientific fact which cannot be questioned." Also, the failure of supervisor
special proceeding) on August 28. When he arrived at PAL BUTUAN at past 2PM, of PAL CEBU to reply to Ong Yiu is not indicative of bad faith. In the absence of a
his blue maleta (which was checked in) could not be found. Around 3PM (same wrongful act or omission or of fraud or bad faith, Atty. Ong Yiu is not entitled to
day), PAL BUTUAN sent a message of the missing luggage to PAL CEBU who moral damages. In upholding the validity of the baggage liability stipulation in the
relayed the message to the Mactan Airport teletype operator around 3:45PM and on ticket, SC held that Ong Yiu is entitled only to P100.00 since he did not declare a
3:59PM PAL Manila wired PAL CEBU an advisory that the luggage was greater value and in lieu of the fact that he is a frequent passenger of PAL and
overcarried to MANILA and that the luggage would be forwarded to CEBU that should have known the same.
same day. The luggage would then be forwarded to BUTUAN on the earliest DOCTRINE: Bad faith means a breach of a known duty through some
available flight. PAL CEBU sent this message from PAL MNL to PAL BUTUAN motive ofinterest or ill will. In contracts, as provided for in Article 2232 of the
around 5PM that the luggage would be forwarded on August 27. However, this was Civil Code, exemplary damages can be granted if the defendant acted in a wanton,
not received by PAL BUTUAN since they already left (no more flights that fraudulent, reckless, oppressive, or malevolent manner, which has not been proven
afternoon). So, Atty. Ong Yiu had no information. Around 10PM he wired a in this case.
telegram to PAL CEBU demanding delivery of baggage the next day, else he would
be suing for damages. The telegram was not received by the PAL supervisor until FACTS:
the following morning. So, when the supervisor received the telegram, he did not 1. August 26, 1967 – Atty. Agustino B. Ong Yiu, pare faying passenger of PAL
feel the need to reply since he assumed by the time he replied, the luggage would on board flight No. 463 – R. Bound for Butuan City from Mactan Cebu
have arrived in BUTUAN. On August 27, Ong Yiu went to the Bancasi Airport to scheduled to attend the trial of a civil case 1005 and special proceeding
inquire, but left too early missing the flight which carried his luggage. His usual 1125 in CFI Branch II, set for hearing on Aug 28, 1967.
drive when he was in BUTUAN, DAGORRO offered to deliver the luggage to Ong a. He checked in one piece of luggage, a blue "maleta" (with Claim
Yiu. So GOMEZ (the porter clerk) handed the luggage to him, but DAGORRO Check No. 2106-R) – the following happened on the same day:
observed that the lock was open, but he still delivered it to Ong Yiu. Upon b. 1PM - plane left Mactan Airport (PAL MACTAN)
inspection by Ong Yiu, the folder containing certain exhibits, transcripts and c. Past 2PM - arrived at Bancasi airport, Butuan City (PAL
private documents in Civil Case 1005 and Special proceeding 1126 were missing CEBU) of the same day.
and only the gifts from his parents-in-law were there. He refused to accept the d. Upon arrival, Atty. Ong Yiu claimed his luggage but it could not be
luggage so DAGORRO returned it to GOMEZ, who sealed it and forwarded to found. According to him, it was only after reacting indignantly to
CEBU. Upon returning to Cebu, he sent a demand letter to PAL for the return of his the loss that the matter was attended to by the porter clerk, Maximo
luggage and damages. They returned it but was not able to figure out who opened Gomez (Gomez), which, however, the latter denies.
his luggage after investigation. Ong Yiu filed for breach of contract of carriage. e. Around 3PM - PAL BUTUAN, sent a message to PAL CEBU,
CFI ruled in favor of Ong Yiu finding PAL acted in bad faith and with malice inquiring about the missing luggage
awarding moral and exemplary damages to Ong Yiu. They both appealed. CA ruled f. 3:45 PM – PAL CEBU relayed in full to the Mactan Airport teletype
that PAL was guilty of only simple negligence and Ong Yiu only entitled to 100 operator that same afternoon. It must have been transmitted to
pesos following the baggage liability clase. Hence, this petition. Manila immediately because around 3:59, MNL replied.
g. 3:59 PM - PAL Manila wired PAL Cebu advising that the luggage
The issue is whether or not CA was correct in finding that PAL was only guilty of had been overcarried to Manila aboard Flight No. 156 and that it
simple negligence - YES. SC upheld CA’s ruling that there was no evidence of bad would be forwarded to Cebu on Flight No. 345 of the same day.
faith. PAL had exerted diligent effort to locate Atty. Ong Yiu’s baggage
 Instructions were also given that the luggage be immediately 4. Meanwhile, Atty. Ong Yiu asked for postponement of the hearing of Civil
forwarded to Butuan City on the first available flight Case due to loss of his documents, which was granted by the Court
h. 5:00 PM – PAL CEBU sent a message to PAL BUTUAN that the 5. August 28, 1967 – He returned to Cebu City
luggage would be forwarded on Flight No. 963 the following day, 6. August 29 – He sent a letter to PAL CEBU – called attention to his telegram
August 27, 1967. and demanded that his luggage be produced intact, and that he be
i. However, this message was not received by PAL BUTUAN as all compensated in the sum of P250,000.00 for actual and moral damages
the personnel had already left since there were no more incoming within five days from receipt of the letter, otherwise, he would file suit.
flights that afternoon. Cdpr 7. August 31, 1967 - Messrs. de Leon, Navarsi, and Agustin, all of PAL
2. In the meantime, Atty. Ong Yiu was worried about the missing luggage CEBU, went to Atty. Ong Yiu’s office to deliver the "maleta".
because it contained vital documents needed for trial the next day. a. In the presence of Mr. Jose Yap and Atty. Manuel Maranga, the
a. 10:00PM (still aug 26) – Atty. Ong You wired a telegram PAL contents were listed and receipted for by Atty. Ong Yiu.
CEBU demanding the delivery of his baggage before noon the next 8. September 5, 1967 – Atty. Ong Yiu sent a tracer letter to PAL CEBU
day, otherwise, he would hold PAL liable for damages, and stating inquiring about the results of the investigation which Messrs. de Leon,
that PAL's gross negligence had caused him undue inconvenience, Navarsi and Agustin had promised to conduct to pinpoint responsibility for
worry, anxiety and extreme embarrassment the unauthorized opening of the "maleta".
b. This telegram was received by the PAL CEBU supervisor but the 9. September 6, 1967, PAL sent its reply:
felt no need to wire Ong Yiu that his luggage had already been a. “First of all, may we apologize for the delay in informing
forwarded on the assumption that by the time the message reached you of the result of our investigation since we visited you in your
Butuan City, the luggage would have arrived. (note the telegram office last August 31, 1967. Since there are stations other than
was already received the following morning, see ratio 9) Cebu which are involved in your case, we have to communicate
3. August 27, 1967 – Early in the morning, Atty. Ong Yiu went to the Bancasi and await replies from them. We regret to inform you that to date
Airport to inquire about his luggage. we have not found the supposedly lost folder of papers nor have
a. However, he did not wait for the 10AM flight carrying the missing we been able to pinpoint the personnel who allegedly pilferred
luggage. GOMEZ (the porter clerk) paged Atty. Ong Yiu, but he your baggage.
had already left. b. "You must realize that no inventory was taken of the cargo upon
b. Emilio Dagorro (DAGORRO), a driver of a "colorum" car, who loading them on any plane. Consequently, we have no
also used to drive for Atty. Ong Yiu, volunteered to take the way of knowing the real contents of your baggage when same
luggage to him. was loaded.
c. Since GOMEZ knew DAGORRO to be the same driver used by 10. September 13, 1967 – Atty. Ong Yiu filed a Complaint against PAL for
Atty. Ong Yiu whenever the latter was in Butuan City, GOMEZ damages for breach of contract of transportation with the CFI Cebu
took the luggage and placed it on the counter. 11. CFI RULING: PAL to have acted in bad faith and with malice and declared
d. DAGORRO examined the lock, pressed it, and it opened. After Atty. Ong Yiu is entitled to moral damages in the gum of P80,000.00,
calling the attention of GOMEZ, the "maleta" was opened, exemplary damages of P30,000.00, attorney's fees of P5,000.00, and costs.
GOMEZ took a look at its contents, but did not touch them. a. Both parties appealed to the CA — that Atty. Ong Yiu was
e. Dagorro then delivered the "maleta" to Atty. Ong Yiu, with the awarded only the sum of P80,000.00 as moral damages; and PAL
information that the lock was open. due to unfavorable judgment
f. Upon inspection, Atty. Ong Yiu found that a folder containing 12. CA RULING: PAL was guilty only of simple negligence, reversed the
certain exhibits, transcripts and private documents in Civil Case judgment of the CFI granting Atty. Ong Yiu moral and exemplary
1005 and Special proceeding 1126 (case said 1125 at first so idk damages, but ordered PAL to pay only the sum of P100.00, the baggage
if same case) were missing, aside from two gift items for his liability assumed by it under the condition of carriage printed at the
parents-in-law. back of the ticket
g. Atty. Ong Yiu refused to accept the luggage so DAGORRO 13. Hence, this Petition for Review by Certiorari by Atty. Ong Yiu
returned it to GOMEZ, who sealed it and forwarded the same to
PAL CEBU.
ISSUE/S: w/n CA was correct in finding that PAL was only guilty of simple 9. The PAL supervisor at Mactan Airport was notified of it only in the
negligence - YES. no evidence of bad faith was found. PAL had exerted diligent morning of the following day. At that time the luggage was already to be
effort to locate Atty. Ong Yiu’s baggage. forwarded to Butuan City.
10. There was no bad faith, therefore, in the assumption made by said supervisor
RULING: Petition denied for lack of merit.
that the plane carrying the bag would arrive at Butuan earlier than a reply
RATIO: telegram.
1. Bad faith means a breach of a known duty through some 11. In reality, had Atty. Ong Yiu waited or caused someone to wait at the Bancasi
motive ofinterest or ill will. airport for the arrival of the morning flight, he would have been able to
2. SC agrees with CA that PAL had not acted in bad faith. It was the retrieve his luggage sooner.LLpr
duty of PAL to look for Atty. Ong Yiu’s luggage which had been miscarried. Due to absence of BF, Atty. Ong Yiu not entitled to MORAL or EXEMP damages.
PAL exerted due diligence in complying with such duty. 12. In the absence of a wrongful act or omission or of fraud or bad faith, Atty.
3. As stated by CA: no evidence of bad faith was found. On the contrary, PAL Ong Yiu is not entitled to moral damages86
had exerted diligent effort to locate Atty. Ong Yiu’s baggage. 13. In contracts, as provided for in Article 2232 of the Civil Code, exemplary
RELAY OF MESSAGES OF MISSING LUGGAGE AMONG PAL BRANCHES damages can be granted if the defendant acted in a wanton, fraudulent,
4. CFI’s evidence pointed to bad faith because PAL sent the telegraphic reckless, oppressive, or malevolent manner, which has not been proven
message to Mactan only at 3:00 o'clock that same afternoon, despite Atty. in this case.
Ong Yiu’s indignation for the non-arrival of his baggage. BAGGAGE LIABILITY CLAUSE (see end of digest)
a. Note that the message was sent within less than one hour after 14. Atty. Ong Yiu further contends that CA committed grave error when it
Atty’s luggage could not be located. Efforts had to be exerted to limited PAL's carriage liability to the amount of P100.00 as stipulated at the
locate his maleta. Then the Bancasi airport had to attend to other back of the ticket.
incoming passengers and to the outgoing passengers. Hence, bad 15. CA ruling was upheld by SC, that generally, pilfering of the “maleta” while
faith cannot be inferred. in custody of PAL presumes that PAL had been negligent. However, such
b. Also, Cebu office immediately wired Manila inquiring about the liability of PAL for the loss shall be limited to the stipulation written on the
missing baggage of the Atty Ong Yiu. back of the ticket which provides that the liability is limited to P100.00 per
5. [see fact 1 (e-g)] At 3:59 P.M., Manila station agent at the domestic baggage, if no greater value is declared.
airport wired Cebu that the baggage was overcarried to Manila. And this a. Since Atty. Ong Yiu did not declare the true value and paid the tariff
message was received in Cebu one minute thereafter, or at 4:00 P.M. The and consequently, did not question the validity of the stipulation,
baggage was in fact sent back to Cebu City that same afternoon. validity cannot be disclaimed by Atty. Ong Yiu.
6. SC found that the following assertion of the court untenable – that the fact b. The stipulation was printed in reasonably and fairly big letters, and
that the message was sent at 3:59 P.M. from Manila and completely relayed are easily readable.
to Mactan at 4:00 P.M., or within one minute, made the message appear c. Moreover, Atty. Ong Yiu had been a frequent passenger of PAL
spurious. from Cebu to Butuan City and back, and he, being a lawyer and
7. A radio message of about 50 words can be completely transmitted in businessman, must be fully aware of these conditions.
even less than one minute, depending upon atmospheric conditions. Even 16. Hence, since Atty. Ong Yiu had failed to declare a higher value for his
if the message was sent from Manila or other distant places, the message baggage, he cannot be permited to recover in excess of P100.00.
can be received within a minute that is a scientific fact which cannot be a. Besides, passengers are advised not to place valuable items inside
questioned." their baggage but to avail of our V-cargo service
Failure to reply to telegram not bad faith [referring to fact 2 (a & b)] b. It is likewise to be noted that there is nothing in the evidence to show
8. Neither was the failure of PAL Cebu to reply to Atty. Ong Yiu’s rush the actual value of the goods allegedly lost by Atty. Ong Yiu.
telegram indicative of bad faith. The telegram was dispatched by petitioner Passenger bound to the contract of carriage
at around 10:00 P.M.of August 26, 1967.

86
Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, incapable of pecuniary computation, moral damages may be recovered if they are the proximate
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. Though result of the defendant's wrongful act ofomission."
 17. But Atty. Ong Yiu argues that there is nothing in the evidence to show that "8. BAGGAGE LIABILITY . . . The total liability of the Carrier for lost or damaged
he had actually entered into a contract with PAL limiting the latter's liability baggage of the passenger is LIMITED TO P100.00 for each ticket unless a
for loss or delay ofthe baggage of its passengers, and that Article 1750 of the passenger declares a higher valuation in excess of P100.00, but not in excess,
Civil Code has not been complied with. however, of a total valuation of P1,000.00 and additional charges are paid pursuant
a. While it may be true that he had not signed the plane, he is to Carrier's tariffs."
bound by the provisions because the provisions have been held
to be a part of the contract of carriage, and valid and binding
upon the passenger regardless of the latter's lack of knowledge
or assent to the regulation.
18. It is what is known as a contract of "adhesion", wherein one party imposes
a ready made form of contract on the other, as the plane ticket in the case at
bar, are contracts not entirely prohibited.
19. The one who adheres to the contract is in reality free to reject it entirely; if he
adheres, he gives his consent.
20. And as held in Randolph v. American Airlines and Rosenchein vs. Trans
World Airlines, Inc. – a contract limiting liability upon an agreed valuation
does not offend against the policy of the law forbidding one from contracting
against his own negligence.phil
(Not relevant but may be asked) Substitution of Atty. Ong Yiu’s widow
21. October 24, 1974 – or 2 months after promulgation of CA’s ruling , Ong
Yiu’s widow filed a motion for substitution since Ong Yiu died on Jan 6
1974; that she only came to know of the adverse Decision on October 23,
1974 when Ong Yiu’s law partner informed her that he received copy of the
Decision on August 28, 1974.
a. Attached to her Motion was an Affidavit of petitioner's law partner
reciting facts constitutive of excusable negligence.
b. CA noted that all pleadings had been signed by Ong Yiu himself
allowed the widow "to take such steps as she or counsel may deem
necessary."
c. She then filed a MR over the opposition of PAL which alleged that
the CA Decision, promulgated on August 22, 1974, had already
become final and executory since no appeal had been interposed
therefrom within the reglementary period.
22. SC considered the demise of Ong Yiu himself, who acted as his own counsel,
it is best that technicality yields to the interests of substantial justice. Besides,
in the last analysis, no serious prejudice has been caused PAL.

RELEVANT PROVISIONS:
Art. 2220. Willful injury to property may be a legal ground for awarding moral
damages if the court should find that, under the circumstances, such damages are
justly due. The same rule applies to breaches of contract where the defendant acted
fraudulently or in bad faith

Baggage Liability Clause

 Pan-American World Airways v. IAC (Linds) have appeared that he had notice at the time of delivery to him of the
Aug. 11, 1988 | Cortes, J. | Contracts particular circumstances attending the shipment, and which probably would
lead to such special loss if he defaulted. Pan-Am cannot be held liable for the
PETITIONER: Pan American World Airways cancellation of private respondents' contracts as it could not have foreseen such
RESPONDENTS: IAC, Pangan, Sotang Bastos Productions, and Archer an eventuality when it accepted the luggages for transit.
Productions
The evidence reveals that the proximate cause of the cancellation of the
SUMMARY: Pangan, President and GM of Sotang Bastos and Archer contracts was private respondent Pangan's failure to deliver the promotional
Productions(“plaintiffs”), entered into an agreement with Primo of Prime Films and advertising materials on the dates agreed upon. For this Pan-Am cannot
in San Francisco, California where Pangan agreed to supply him/it 3 films. be held liable.
Plaintiffs would also provide them with necessary promotional and
DOCTRINE: A contract limiting liability upon an agreed valuation does not
advertising materials. On the way home to the Philippines, Pangan visited Guam
to contact Leo of Hafa Adai and entered into a verbal agreement with him for the offend against the policy of the law forbidding one from contracting against his
exhibition of 2 films. He also undertook to provide the necessary promos and own negligence.
ad materials on a certain date. In preparation for these undertakings,
Pangan prepared promo handbills and still pictures, bough clutch bags, Before a party could be held to special damages, such as the present alleged loss
capiz lamps, and barong tagalog for these agreements. of profits on account of delay or failure of delivery, it must have appeared that he
had notice at the time of delivery to him of the particular circumstances attending
In the Philippines, Pangan obtained from Pan-Am through Your Travel Guide, an the shipment, and which probably would lead to such special loss if he defaulted.
economy class ticket from Manila to Guam. 2 hours before departure, Pangan was
at Pan-Am’s counter at MIA(NAIA) and presented his ticket and 2 luggages. FACTS:
These luggages contain the material he bought for the undertakings. He was 10. On April 25, 1978, plaintiff Rene V. Pangan, president and general manager
informed that he was not in the passenger manifest; wanting to go to Guam on of the plaintiffs Sotang Bastos and Archer Production while in San
time, he bought first class tickets. However, in Guam, his luggages did not arrive. Francisco, Califonia and Primo Quesada of Prime Films, San Francisco,
He alleged that this is the reason why his undertakings were cancelled and that California, entered into an agreement (Exh. A) whereby the former, for and
there were unrealized profits. He served Pan-Am a written claim for damages. in consideration of the amount of US $2,500.00 per picture, bound himself to
Then, he sued Pan-Am for failure to communicate. The CFI awarded actual supply the latter with three films. 'Ang Mabait, Masungit at ang Pangit,' 'Big
damages, including lost profits and attorney’s fees. IAC affirmed. Happening with Chikiting and Iking,' and 'Kambal Dragon' for exhibition in
the United States.
The issues in this case are whether the courts below erred in not limiting the 11. It was also their agreement that plaintiffs would provide the necessary
liability of Pan-Am as to what is stipulated in the ticket, and awarding lost profits promotional and advertising materials for said films on or before May 30,
as actual damages. Yes to both. 1978.
12. On his way home to the Philippines, plaintiff Pangan visited Guam where he
Warsaw Convention is not against public policy. A contract limiting liability contacted Leo Slutchnick of the Hafa Adai Organization.
upon an agreed valuation does not offend against the policy of the law 13. Plaintiff Pangan likewise entered into a verbal agreement with Slutchnick
forbidding one from contracting against his own negligence. In this case, since for the exhibition of two of the films above-mentioned at the Hafa Adai
Pangan failed to declare a higher value of his luggages, then Pan-Am’s liability Theater in Guam on May 30, 1978 for the consideration of P7,000.00 per
would be limited as to what is stipulated in the ticket. The case of Shewaram is picture.
not applicable since in that case, the stipulation limiting the airline’s liability is 14. Plaintiff Pangan undertook to provide the necessary promotional and
too small to read. advertising materials for said films on or before the exhibition date on May
30,1978.
As to lost profits, before Pan-Am could be held to special damages, such as the 15. By virtue of the above agreements, plaintiff Pangan caused the preparation
present alleged loss of profits on account of delay or failure of delivery, it must of the requisite promotional handbills and still pictures for which he paid the
 total sum of P12,900.00. (2) Whether the CFI erred in awarding damages due to lost profits. Yes. Pan-Am was
16. Likewise in preparation for his trip abroad to comply with his contracts, in good faith and cannot be held liable for damages which cannot be reasonably
plaintiff Pangan purchased fourteen clutch bags, four capiz lamps and four foreseen by the good-faith party.
barong tagalog, with a total value of P4,400.00.
17. On May 18, 1978, plaintiff Pangan obtained from defendant Pan Am's RULING: Petition granted.
Manila Office, through the Your Travel Guide, an economy class
airplane ticket with No. 0269207406324 for passage from Manila to Guam RATIO:
on defendant's Flight No. 842 of May 27,1978, upon payment by said plaintiff
of the regular fare. Ruling as to liability of the common carrier under the Warsaw Convention -
18. The Your Travel Guide is a tour and travel office owned and managed by
plaintiffs witness Mila de la Rama. 16. Pertinent provisions in the airline ticket:
19. On May 27, 1978, two hours before departure time plaintiff Pangan was at a. Carriage hereunder is subject to the rules and limitations relating to
the defendant's ticket counter at the Manila International Airport and liability established by the Warsaw Convention unless such carriage
presented his ticket and checked in his two luggages, for which he was given is not "international carriage" as defined by that Convention.
baggage claim tickets Nos. 963633 and 963649. b. Liability for loss, delay, or damage to baggage is limited as follows
20. The two luggages contained the promotional and advertising materials, the unless a higher value is declared in advance and additional charges
clutch bags, barong tagalog and his personal belongings. are paid: (1)for most international travel (including domestic
21. Subsequently, Pangan was informed that his name was not in the manifest portions of international journeys) to approximately $9.07 per
and so he could not take Flight No. 842 in the economy class. pound ($20.00 per kilo) for checked baggage x x x
22. Since there was no space in the economy class, plaintiff Pangan took the first 17. Ong Yiu v. CA is squarely applicable:
class because he wanted to be on time in Guam to comply with his a. While it may be true that petitioner had not signed the plane ticket
commitment, paying an additional sum of $112.00. he is nevertheless bound by the provisions thereof. "Such provisions
23. When plaintiff Pangan arrived in Guam on the date of May 27, 1978, his two have been held to be a part of the contract of carriage, and valid and
luggages did not arrive with his flight, as a consequence of which his binding upon the passenger regardless of the latter's lack of
agreements with Slutchnick and Quesada for the exhibition of the films in knowledge or assent to the regulation."
Guam and in the United States were cancelled. b. It is what is known as a contract of "adhesion," in regards which it
24. Thereafter, he filed a written claim for his missing luggages. has been said that contracts of adhesion wherein one party imposes
25. Upon arrival in the Philippines, Pangan contacted his lawyer, who made the a ready made form of contract on the other, as the plane ticket in the
necessary representations to protest as to the treatment which he received case at bar, are contracts not entirely prohibited. The one who
from the employees of the defendant and the loss of his two luggages . adheres to the contract is in reality free to reject it entirely; if he
26. Defendant Pan Am assured plaintiff Pangan that his grievances would be adheres, he gives his consent
investigated and given its immediate consideration. c. "a contract limiting liability upon an agreed valuation does not
27. Due to the defendant's failure to communicate with Pangan about the action offend against the policy of the law forbidding one from
taken on his protests, the present complaint was filed by the plaintiff. contracting against his own negligence."
28. The CFI ordered Pan-Am to pay 83T actual damages, and 10T attorney’s 18. The contrary case, Shewaram v. Philippine Airlines, is not applicable since it
fees. is not on all fours on this case:
29. IAC affirmed in toto. a. the Court held that the stipulation limiting the carrier's liability to a
30. Pan-Am contends before the SC that the courts a quo erred in awarding actual specified amount was invalid, finds no application in the instant
damages since Pangan did not declare a higher value for his baggages. case, as the ruling in said case was premised on the finding that
the conditions printed at the back of the ticket were so small and
ISSUE: (1) Whether the CFI erred when it awarded actual damages beyond the hard to read that they would not warrant the presumption that
stipulated conditions in the airline ticket. Yes. Pangan did not declare a higher value the passenger was aware of the conditions and that he had freely
for his baggage. and fairly agreed thereto. In the instant case, similar facts that
would make the case fall under the exception have not been alleged,
 much less shown to exist. respondents' contracts as it could not have foreseen such an eventuality
19. As regards the IAC/CA’s misconception that Warsaw Covention is against when it accepted the luggages for transit.
our public policy since it limits the liability of common carries by reason of 23. The evidence reveals that the proximate cause of the cancellation of the
negligence, by citing Northwest v. Cuenca: contracts was private respondent Pangan's failure to deliver the
a. the Court never intended to, and in fact never did, rule against the promotional and advertising materials on the dates agreed upon. For this
validity of provisions of the Warsaw Convention. Consequently, by petitioner cannot be held liable. Private respondent Pangan had not declared
no stretch of the imagination may said quotation from Northwest be the value of the two luggages he had checked in and paid additional charges.
considered as supportive of the appellate court's statement that the Neither was petitioner privy to respondents' contracts nor was its attention
provisions of the Warsaw Convention limited a carrier's liability are called to the condition therein requiring delivery of the promotional and
against public policy. advertising materials on or before a certain date.

Ruling as to lost profits –

20. In Mendoza v. Philippine Airlines,:
a. Under Art.1107 of the Civil Code, a debtor in good faith like the
defendant herein, may be held liable only for damages that were
foreseen or might have been foreseen at the time the contract of
transportation was entered into. The trial court correctly found
that the defendant company could not have foreseen the damages
that would be suffered by Mendoza upon failure to deliver the can
of film on the 17th of September, 1948 for the reason that the plans
of Mendoza to exhibit that film during the town fiesta and his
preparations, specially the announcement of said exhibition by
posters and advertisement in the newspaper, were not called to the
defendant's attention.
21. The court found Chapman v. Fargo87 applicable:
a. But before defendant could be held to special damages, such as the
present alleged loss of profits on account of delay or failure of
delivery, it must have appeared that he had notice at the time of
delivery to him of the particular circumstances attending the
shipment, and which probably would lead to such special loss if
he defaulted. Or, as the rule has been stated in another form, in
order to purpose on the defaulting party further liability than for
damages naturally and directly, i.e., in the ordinary course of things,
arising from a breach of contract, such unusual or extraordinary
damages must have been brought within the contemplation of the
parties as the probable result of breach at the time of or prior to
contracting. Generally, notice then of any special circumstances
which will show that the damages to be anticipated from a breach
would be enhanced has been held sufficient for this effect.
22. In the absence of a showing that Pan-Am's attention was called to the special
circumstances requiring prompt delivery of private respondent Pangan's
luggages, Pan-Am cannot be held liable for the cancellation of private

87
U.S. case
019 PAKISTAN INTERNATIONAL AIRLINES vs. OPLE (Cruz edited by
Buenaventura) FACTS:
September 28, 1990 | Austria-Martinez, J. | Contracts 1. On December 2, 1978, Pakistan International Airlines Corporation ("PIA"),
a foreign corporation licensed to do business in the Philippines, executed in
PETITIONER: Pakistan International Airlines Corporation Manila two (2) separate contracts of employment, one with Farrales and the
RESPONDENTS: Hon. Blas F. Ople, (Minister Of Labor) Hon. Vicente other with Mamasig.
Leogardo, Jr., (Deputy Minister) and Ethelynne B. Farrales And Maria 2. The contract became effective on January 9, 1979. It provides
Moonyeen Mamasig a. DURATION OF EMPLOYMENT AND PENALTY
SUMMARY: Pakistan International Airlines Corporation ("PIA"), a foreign This agreement is for a period of three (3) years, but can be extended by
corporation licensed to do business in the Philippines, executed in Manila two the mutual consent of the parties.
(2) separate contracts of employment, one with Farrales and the other with b. TERMINATION
Mamasig. Notwithstanding anything to contrary as herein provided, PIA reserves
PIA dismissed Farrales and Mamasig, who were working as flight attendants, 1 the right to terminate this agreement at any time by giving the
year and 4 months prior to the expiration of their employment contracts. EMPLOYEE notice in writing in advance one month before the intended
Farrales and Mamasig jointly instituted a complaint for illegal dismissal and termination or in lieu thereof, by paying the EMPLOYEE wages
non-payment of company benefits and bonuses, against PIA with MOLE which equivalent to one month's salary.
decided in their favor. PIA filed for certiorari in the SC contesting that its PIA’s c. APPLICABLE LAW:
relationship with Farrales and Mamasig was governed by the provisions of This agreement shall be construed and governed under and by the laws of
its contract rather than by the general provisions of the Labor Code. Pakistan, and only the Courts of Karachi, Pakistan shall have the
The issues are; WoN PIA’s relationship with Farrales and Mamasig was jurisdiction to consider any matter arising out of or under this agreement.
governed by the provisions of its contract rather than by the general provisions 3. Both trained in Pakistan and then began discharging their job functions as
of the Labor Code - SC held NO, though parties may establish such stipulations flight attendants, with base station in Manila and flying assignments to
as they may deem convenient, it must not be that which is contrary to law, different parts of the Middle East and Europe.
morals, good customs, public order or public policy as provided in Art 1306 of 4. Roughly 1 year and 4 months prior to the expiration of the contracts of
CC. In this case, par 5 and 6 in the agreement as claimed by PIA is contrary to employment, PIA through Mr. Oscar Benares, counsel for and official of
Art 280 and 281 of the Labor Code as it was intended to prevent any security of the local branch of PIA, sent separate letters both dated 1 August 1980 to
tenure from accruing in favor of the flight attendants even during the limited Farrales and Mamasig advising both that they would be terminated
period of 3 years. "effective 1 September 1980, conformably to clause 6 (b) of the
WoN Philippine courts have jurisdiction? - SC held YES, PIA cannot take employment agreement [they had] executed with [PIA]."
refuge in paragraph 10 of its employment agreement which specifies, firstly, the 5. Farrales and Mamasig jointly instituted a complaint for illegal dismissal and
law of Pakistan as the applicable law of the agreement and, secondly, lays the non-payment of company benefits and bonuses, against PIA with the then
venue for settlement of any dispute arising out of or in connection with the Ministry of Labor and Employment ("MOLE").
agreement “only [in] courts of Karachi Pakistan”. 6. Upon order of the MOLE officer, PIA submitted its position paper claiming
We have already pointed out that the relationship is much affected with public that Farrales and Mamasig are:
interest and that the otherwise applicable Philippine laws and regulations cannot a. Both are habitual absentees
be rendered illusory by the parties agreeing upon some other law to govern their b. Both were in the habit of bringing in from abroad sizeable quantities of
relationship. “personal effects”
PIA cannot invoke the said provisions in the agreement. Thus, Farrales and c. PIA personnel at the Manila International Airport had been discreetly
Mamasig are illegally dismissed and are entitled to backwages and warned by customs officials to advise both to discontinue that practice
reinstatement. 7. Regional Director Francisco L. Estrella ordered the reinstatement of private
respondents with full backwages or, in the alternative, the payment to them
DOCTRINE: The principle of party autonomy in contracts is not an absolute of their salaries for the remainder of the fixed 3 year period of their
principle. Its provisions must not be contrary to law, morals, good customs, employment contracts.
public order or public policy as provided in Art 1306 of CC
 a. They attained the status of regular employees after they had rendered rendered by them and for the three (3) years putative service by private respondents.
more than a year of continued service. The Temporary Restraining Order issued on 13 September 1982 is hereby LIFTED.
b. The stipulation limiting the period of the employment contract to 3 years Costs against petitioner.
was null and void as violative of the provisions of the Labor Code on RATIO:
regular and casual employment. 1. Article 1306 of the Civil Code - the contracting parties may establish such
c. The dismissal have been carried out without the requisite clearance from stipulations as they may deem convenient, "provided they are not contrary to
the MOLE. law, morals, good customs, public order or public policy."
8. The Deputy Minister of MOLE affirmed the Regional Director’s order.
9. PIA filed for certiorari in the SC 2. Parties may not contract away applicable provisions of law especially
a. The Regional Director had no jurisdiction over the subject matter of the peremptory provisions dealing with matters heavily impressed with public
complaint for illegal dismissal because it is lodged in the Arbitration interest. The law relating to labor and employment is clearly such an area and
Branch of the National Labor Relations Commission (NLRC) parties are not at liberty to insulate themselves and their relationships from
i. SC: The Regional Director has jurisdiction over termination cases the impact of labor laws and regulations by simply contracting with each
based on the Labor Code other. It is thus necessary to appraise the contractual provisions invoked by
b. Even if the Regional Director had jurisdiction, still his order was null PIA in terms of their consistency with applicable Philippine law and
and void because it had been issued in violation of petitioner's right to regulations.
procedural due process
i. Even if no formal or oral hearing was conducted, petitioner had 3. The employment contracts were inconsistent with Article 280 – 281 of the
ample opportunity to explain its side when it was ordered by the Labor Code.
Regional Director to submit not only its position paper but also such
evidence in its favor. PIA opted to rely on its position paper. a. Paragraph 5 of that contract set a term of 3 years for that relationship,
c. PIA’s relationship with Farrales and Mamasig was governed by the extendible by agreement between the parties; while paragraph 6 provided
provisions of its contract rather than by the general provisions of that, notwithstanding any other provision in the Contract, PIA had the
the Labor Code. right to terminate the employment agreement at any time by giving one-
month's notice to the employee or, in lieu of such notice, one-months
ISSUES: salary.
1. WoN PIA’s relationship with Farrales and Mamasig was governed by the b. Art. 280. Security of Tenure. — In cases of regular employment, the
provisions of its contract rather than by the general provisions of the Labor employer shall not terminate the services of an employee except for a just
Code – NO although parties may establish such stipulations as they may cause or when authorized by this Title An employee who is unjustly
deem convenient, it must not be that which is contrary to law, morals, good dismissed from work shall be entitled to reinstatement without loss of
customs, public order or public policy seniority rights and to his backwages computed from the time his
2. WoN Philippine courts have jurisdiction? - SC held YES, the relationship is compensation was withheld from him up to the time his reinstatement.
much affected with public interest and that the otherwise applicable
Philippine laws and regulations cannot be rendered illusory by the parties Art. 281. Regular and Casual Employment. The provisions of written
agreeing upon some other law to govern their relationship. agreement to the contrary notwithstanding and regardless of the oral
agreements of the parties, an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are
RULING: ACCORDINGLY, the Petition for certiorari is hereby DISMISSED for usually necessary or desirable in the usual business or trade of the
lack of merit, and the Order dated 12 August 1982 of public respondent is hereby employer, except where the employment has been fixed for a specific
AFFIRMED, except that (1) private respondents are entitled to three (3) years project or undertaking the completion or termination of which has been
backwages, without deduction or qualification; and (2) should reinstatement of determined at the time of the engagement of the employee or where the
private respondents to their former positions or to substantially equivalent positions work or services to be performed is seasonal in nature and the
not be feasible, then petitioner shall, in lieu thereof, pay to private respondents employment is for the duration of the season.
separation pay amounting to one (1)-month's salary for every year of service actually
 An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: provided, that, any employee who has rendered
at least one year of service, whether such service is continuous or
broken, shall be considered as regular employee with respect to the
activity in which he is employed and his employment shall continue
while such actually exists. (Emphasis supplied)

4. Brent School vs Zamora - contract providing for employment with a fixed

period was not necessarily unlawful. The presence or absence of a substantial
indication that the period specified in an employment agreement was
designed to circumvent the security of tenure of regular employees which is
provided for in Articles 280 and 281 of the Labor Code.

5. Paragraphs 5 and 6 of the employment agreement between PIA and Farrales

and Mamasig was intended to prevent any security of tenure from accruing
in favor of the flight attendants even during the limited period of 3 years, and
thus to escape completely the thrust of Articles 280 and 281 of the Labor
Code.
6. Petitioner PIA cannot take refuge in paragraph 10 of its employment
agreement which specifies, firstly, the law of Pakistan as the applicable law
of the agreement and, secondly, lays the venue for settlement of any dispute
arising out of or in connection with the agreement “only [in] courts of Karachi
Pakistan”.
7. We have already pointed out that the relationship is much affected with public
interest and that the otherwise applicable Philippine laws and regulations
cannot be rendered illusory by the parties agreeing upon some other law to
govern their relationship.
8. The contract was not only executed in the Philippines, it was also performed
here, at least partially; private respondents are Philippine citizens and
respondents, while petitioner, although a foreign corporation, is licensed to
do business (and actually doing business) and hence resident in the
Philippines; lastly, private respondents were based in the Philippines in
between their assigned flights to the Middle East and Europe. All the above
contacts point to the Philippine courts and administrative agencies as a proper
forum for the resolution of contractual disputes between the parties.
9. Under these circumstances, paragraph 10 of the employment agreement
cannot be given effect so as to oust Philippine agencies and courts of the
jurisdiction vested upon them by Philippine law. Finally, and in any event,
the petitioner PIA did not undertake to plead and prove the contents of
Pakistan law on the matter; it must therefore be presumed that the applicable
provisions of the law of Pakistan are the same as the applicable provisions of
Philippine law.
 20 Triple Eight v. NLRC (CELAJE) applicable to a particular situation, Philippine courts will not enforce it if the
G.R. No. 129584 | December 3, 1998 | Romero, J. | lex loci contractus law is repugnant to the public policy of the Philippines.

PETITIONER: Triple Eight Integrated Services, Inc.

RESPONDENTS: NLRC, Erlinda Osdana
FACTS:
SUMMARY: Private Respondent Osdana was recruited by petitioner Triple
Eight to work in Saudi Arabia for the latter's principal, Gulf Catering Company 1. Sometime in August 1992, private respondent Osdana was recruited by
petitioner Triple Eight for employment with the latter's principal, Gulf
(GCG). While working in Saudi, private respondent Osdana developed Carpal
Catering Company (GCC), a firm based in the Kingdom of Saudi Arabia.
Tunnel Syndrome. She was thus eventually sent home by GCG. Private Under the original employment contract, Osdana was engaged to work as
respondent Osdana then filed a complaint against Triple Eight for illegal "Food Server" for a period of thirty-six (36) months with a salary of five
dismissal. One of the grounds for the illegality of the dismissal was that the hundred fifty Saudi rials (SR550).
dismissal was not accompanied by a certification by competent public authority
2. Osdana claims she was required by petitioner Triple Eight to pay a total of
that the disease is of such nature or at such a stage that it cannot be cured (P11,950.00) in placement fees and other charges, for which no receipt was
within a period of six 6 months with proper medical treatment, which is issued. She was likewise asked to undergo a medical examination conducted
required by Labor Code and its IRR. Petition Triple Eight claims that it did not by the Philippine Medical Tests System, a duly accredited clinic for overseas
need to comply with this provision by contending that since Osdana was workers, which found her to be "Fit of Employment."
working in Saudi Arabia, her employment was subject to the laws of the host 3. Subsequently, petitioner Triple Eight asked Osdana to sign another
country and apparently the labor laws of Saudi Arabia do not require any "Contractor Employee Agreement" which provided that she would be
certification by a competent public health authority in the dismissal of employed as a waitress for twelve (12) months with a salary of two hundred
employees due to illness. eighty US dollars ($280). It was this employment agreement which was
approved by the (POEA).
ISSUE: W/N petitioner Triple Eight is correct. NO. First, established is the 4. On September 16, 1992, Osdana left for Riyadh, Saudi Arabia, and
rule that lex loci contractus (the law of the place where the contract is made) commenced working for GCC. She was assigned to the College of Public
governs in this jurisdiction. There is no question that the contract of Administration of the Oleysha University and, contrary to the terms and
employment in this case was perfected here in the Philippines. Therefore, the conditions of the employment contract, was made to wash dishes, cooking
Labor Code, its implementing rules and regulations, and other laws affecting pots, and utensils, perform janitorial work and other tasks which were
unrelated to her job designation as waitress. Worse, she was made to work a
labor apply in this case. Furthermore, settled is the rule that the courts of the
grueling twelve-hour shift, from six o'clock in the morning to six o'clock in
forum will not enforce any foreign claim obnoxious to the forum's public the evening, without overtime pay.
policy. Here in the Philippines, employment agreements are more than
contractual in nature. The Constitution itself, in Article XIII Section 3, 5. Because of the long hours and the strenuous nature of her work, Osdana
suffered from numbness and pain in her arms. The pain was such that she had
guarantees the special protection of workers. This public policy should be
to be confined at the Ladies Villa, a housing facility of GCC during which
borne in mind in this case because to allow foreign employers to determine for period, she was not paid her salaries.
and by themselves whether an overseas contract worker may be dismissed on
6. After said confinement, Osdana was allowed to resume work, this time as
the ground of illness would encourage illegal or arbitrary pre-termination of
Food Server and Cook at the Hota Bani Tameem Hospital, where she worked
employment contracts. seven days a week from August 22 to October 5, 1993. Again, she was not
compensated.
DOCTRINE: Lex loci contactus (the law of the place where the contract is
made) governs in the Philippines. Also, assuming that a foreign law is 7. Then, from October 6 to October 23, 1993, Osdana was again confined at the
Ladies Villa for no apparent reason. During this period, she was still not paid
 her salary. and (US$1,076), or its equivalent in Philippine pesos, representing unpaid salaries
for seven (7) months and underpaid salary for one (1) month, plus interest. Petitioner
8. On October 24, 1993, she was re-assigned to the Oleysha University to wash
is likewise ordered to pay private respondent P30,000.00 in moral damages,
dishes and do other menial tasks. As with her previous assignment at the said
P10,000.00 in exemplary damages and 10% attorney's fees.
University, Osdana worked long hours and under harsh conditions.
9. Because of this, she was diagnosed as having Bilateral Carpal Tunnel
Syndrome, a condition precipitated by activities requiring "repeated flexion, RATIO:
pronation, and supination of the wrist and characterized by excruciating pain
1. Petitioner Triple Eight consistently asserted that Osdana was validly
and numbness in the arms." As the pain became unbearable, Osdana had to
repatriated for medical reasons, but it failed to substantiate its claim that such
be hospitalized. She underwent two surgical operations, one in January 1994,
repatriation was justified and done in accordance with law.
another on April 23, 1994.
2. Art. 284 of the Labor Code is clear on the matter of termination by reason of
10. After her second operation, Osdana was discharged From the hospital on
disease or illness, viz:
April 25, 1994. The medical report stated that "she had very good
improvement of the symptoms and she was discharged on the second day of a. Art. 284. Disease as a ground for termination — An employer may terminate the
the operation. 6 services of an employee who has been found to be suffering from any disease and
whose continued employment is prohibited by law or prejudicial to his health as well
11. Four days later, however, she was dismissed from work, allegedly or, the as the health of his co-employees: . . . .
ground of illness. She was not given any separation pay nor was she paid her 3. Specifically, Section 8, Rule 1, Book VI of the Omnibus Rules Implementing
salaries for the periods when she was not allowed to work. the Labor Code provides:
12. Upon her return to the Philippines, Osdana sought the help of petitioner a. Sec. 8. Disease as a ground for dismissal — Where the employee suffers from a
Triple Eight, but to no avail. She was thus constrained to file a complaint disease and his continued employment is prohibited by law or prejudicial to his health
before the POEA against petitioner, praying for unpaid and underpaid or to the health of his co-employees, the employer shall not terminate his employment
unless there is a certification by competent public authority that the disease is of
salaries, salaries for the unexpired portion of the employment contract, moral such nature or at such a stage that it cannot be cured within a period of six 6
and exemplary damages and attorney's fees. months with proper medical treatment. If the disease or ailment can be cured within
the period, the employer shall not terminate the employee but shall ask the employee
13. In a decision dated August 20, 1996, the labor arbiter ruled in favor of to take a leave. The employer shall reinstate such employee to his former position
Osdana: Wherefore, the petitioner Triple Eight is hereby ordered to pay the complainant immediately upon the restoration of his normal health.
Osdana US$2,499.00 as salaries for the unexpired portion of the contract, and US$1,076.00 as
unpaid salary and salary differential, or its equivalent in Philippine Peso. The respondent is 4. Viewed in the light of the foregoing provisions, the manner by which Osdana
likewise ordered to pay the complainant P50,000 moral damages, and P20,000 exemplary was terminated was clearly in violation of the Labor Code and its
damages. NLRC affirmed. Hence this petition. implementing rules and regulations.
5. In the first place, Osdana's continued employment despite her illness was not
prohibited by law nor was it prejudicial to her health, as well as that of her
ISSUES:
co-employees. In fact, the medical report issued after her second operation
1. W/N Osdana was validly dismissed on the ground of illness. No, petitioner stated that "she had very good improvement of the symptoms." Besides,
Triple Eight did accompany the dismissal with a certification by competent "Carpal Tunnel Syndrome" is not a contagious disease.
public authority.
6. Petitioner Triple Eight attributes good faith on the part of its principal,
claiming that "It was the concern for the welfare and physical well being (sic)
of private respondent Osdana that drove her employer to take the painful
RULING: WHEREFORE, in view of the foregoing, the instant petition is
decision of terminating her from the service and having her repatriated to the
DISMISSED. Accordingly, the decisions of the labor arbiter dated August 20, 1996,
Philippines at its expense. The employer did not want to risk the aggravation
and of the NLRC dated March 11, 1997, are AFFIRMED with the MODIFICATION
of the illness of private respondent Osdana which could have been the logical
that the award to private respondent Osdana should be (US$1,260), or its equivalent
consequence were private respondent Osdana allowed to continue with her
in Philippine pesos, as salaries for the unexpired portion of the employment contract,
 job." b. It shall guarantee the rights of all workers to self-organization, collective bargaining
and negotiations, and peaceful concerted activities, including the right to strike in
7. The Court notes, however, that aside from these bare allegations, petitioner accordance with law. They shall be entitled to security of tenure, humane conditions
Triple Eight has not presented any medical certificate or similar document of work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
from a competent public health authority in support of its claims.
8. On the medical certificate requirement, petitioner Triple Eight erroneously argues that "private
17. This public policy should be borne in mind in this case because to allow
respondent Osdana was employed in Saudi Arabia and not here in the Philippines. Hence, there foreign employers to determine for and by themselves whether an overseas
was a physical impossibility to secure from a Philippine public health authority the alluded contract worker may be dismissed on the ground of illness would encourage
medical certificate that public respondent Osdana's illness will not be cured within a period of illegal or arbitrary pre-termination of employment contracts.
six months." 17
9. Petitioner Triple Eight entirely misses the point, as counsel for private respondent states in the
18. Simplified Version: Assuming that Saudi laws (non-requirement of
Comment. 18 The rule simply prescribes a "certification by a competent public health authority" certification from competent authority) are applicable here, Philippine courts
and not a "Philippine public health authority." should still not enforce it for such laws would be repugnant to the public
10. If, indeed, Osdana was physically unfit to continue her employment, her employer could have policy of the Philippines.
easily obtained a certification to that effect from a competent public health authority in Saudi
Arabia, thereby heading off any complaint for illegal dismissal.
19. SC upheld petitioner Triple Eight's liability for unexpired portion, unpaid
salaries and damages.
11. The requirement for a medical certificate under Article 284 of the Labor Code
20. [Just in case mam asks]: Finally, petitioner Triple Eight alleges save abuse of discretion on the
cannot be dispensed with; otherwise, it would sanction the unilateral and part of public respondents for holding it solely liable for the claims of Osdana despite the fact
arbitrary determination by the employer of the gravity or extent of the that its liability with the principal is joint and several.
employee's illness and thus defeat the public policy on the protection of labor.
21. Petitioner Triple Eight misunderstands the decision in question. It should be noted that contrary
12. Petitioner Triple Eight likewise attempts to sidestep the medical to petitioner's interpretation, the decision of the labor arbiter which was affirmed by the NLRC
did not really absolve the foreign principal.
certificate requirement by contending that since Osdana was working in
Saudi Arabia, her employment was subject to the laws of the host 22. Petitioner Triple Eight was the only one held liable for Osdana's monetary claims because it was
country. the only respondent named in the complaint and it does not appear that petitioner took steps to
have its principal included as co-respondent. Thus, the POEA, and later the labor arbiter, did not
13. Apparently, petitioner Triple Eight hopes to make it appear that the acquire jurisdiction over the foreign principal.
labor laws of Saudi Arabia do not require any certification by a 23. This is not to say, however, that GCC may not be field liable at all. Petitioner can still claim
competent public health authority in the dismissal of employees due to reimbursement or contribution from it for the amounts awarded to the illegally-dismissed
employee.
illness.
14. Again, petitioner Triple Eight's argument is without merit.
15. First, established is the rule that lex loci contactus (the law of the place where
the contract is made) governs in this jurisdiction. There is no question that
the contract of employment in this case was perfected here in the Philippines.
Therefore, the Labor Code, its implementing rules and regulations, and other
laws affecting labor apply in this case.
16. Furthermore, settled is the rule that the courts of the forum will not enforce
any foreign claim obnoxious to the forum's public policy. 20 Here in the
Philippines, employment agreements are more than contractual in nature. The
Constitution itself, in Article XIII Section 3, guarantees the special protection
of workers, to wit:
a. The State shall afford fill protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment
opportunities for all.
021 PHIL. EXPORT AND FOREIGN LOAN GUARANTEE CORP V. V.P. undertaking and surety bond. When the respondents failed to pay, Philguarantee
EUSEBIO CONSTRUCTION INC. (CRUZ) filed a civil case for collection of a sum of money against the respondents before
July 13, 2004 | Davide, Jr., J. | Contracts the RTC of Makati City. RTC: Philguarantee has no valid cause of action against
PETITIONER: Philippine Export and Foreign Loan Guarantee Corporation the respondents since there was no valid renewal or extension of the guarantee
RESPONDENTS: V.P. Eusebio Construction, Inc.; 3-plex International, Inc.; for failure of the petitioner to secure respondents express consent and that the
Vicente P. Eusebio; Soledad C. Eusebio; Eduardo E. Santos; Iluminda Santos; joint venture contractor incurred no delay in the execution of the Project. CA:
and First Integrated Bonding and Insurance Company, Inc. Affirmed RTC. ISSUE: What law should be applied in determining whether
SUMMARY: State Organization of Buildings (SOB) which is the Ministry of the Joint Venture has defaulted? Philippine law. The question of whether there
Housing and Construction in Baghdad Iraq awarded the construction of their is a breach of an agreement, which includes default or mora, pertains to the
Institute of Physical Therapy Medical Rehabilitation Center to Ajyal Trading and essential or intrinsic validity of a contract. Philippine courts would do well to
Contracting Company. Thereafter, Ajyal entered a joint venture with 3-Plex adopt the first and most basic rule in most legal systems, namely, to allow the
International (a local contractor) wherein 3-Plex undertook the execution of the parties to select the law applicable to their contract, subject to the limitation that
entire Project, while Ajyal would be entitled to a commission. Later, 3-Plex it is not against the law, morals, or public policy of the forum and that the chosen
transferred all its rights and interests under the joint venture agreement to VPECI. law must bear a substantive relationship to the transaction. It must be noted that
The two agreed that the execution of the Project would be under their joint the service contract between SOB and VPECI contains no express choice of the
management. SOB then required the contractors to submit a performance bond of law that would govern it. In the United States and Europe, the two rules that now
5% representing the total contract price and an advance payment bond of 10%. seem to have emerged as kings of the hill are (1) the parties may choose the
To comply, 3-Plex and VPECI applied for the issuance of a guarantee with governing law; and (2) in the absence of such a choice, the applicable law is that
Philguarantee. Subsequently, letters of guarantee were issued by Philguarantee to of the State that has the most significant relationship to the transaction and the
Rafidain Bank of Baghdad (the 188 government bank of Iraq), but they were not parties. Another authority proposed that all matters relating to the time, place, and
accepted by SOB. What SOB required was a letter guarantee from Rafidain Bank. manner of performance and valid excuses for nonperformance are determined by
Rafidain Bank then issued a performance bond in favor of SOB on the condition the law of the place of performance or lex loci solutionis, which is useful because
that another foreign bank would issue a counter-guarantee. Al Ahli Bank of it is undoubtedly always connected to the contract in a significant way. In this
Kuwait was therefore engaged to provide a counter-guarantee to Rafidain Bank, case, the laws of Iraq bear substantial connection to the transaction, since one of
but it required a similar counter-guarantee in its favor from Philguarantee. Thus, the parties is the Iraqi Government and the place of performance is in Iraq. Hence,
creating three layers of guarantees. On 11 June 1981, the service contract for the the issue of whether VPECI defaulted in its obligations may be determined by
construction project was executed. Thereafter, the construction suffered some the laws of Iraq. However, since that foreign law was not properly pleaded
setbacks and difficulties. The Project was not completed as scheduled. Upon or proved, the presumption of identity or similarity, otherwise known as the
foreseeing the impossibility of meeting the deadline, the joint venture contractor processual presumption, comes into play. Where foreign law is not pleaded or,
worked for the renewal or extension of the Performance Bond and Advance even if pleaded, is not proved, the presumption is that foreign law is the same as
Payment Guarantee. (Performance Bond was extended for 13 times, Advance ours.
Payment Bond was extended for 4 times and surety bond was likewise extended.) DOCTRINE: No conflicts rule on essential validity of contracts is expressly
On 26 October 1986, Al Ahli Bank of Kuwait sent a telex call to Philguarantee provided for in our laws. The rule followed by most legal systems, however, is
demanding full payment of its performance bond counter-guarantee. Upon that the intrinsic validity of a contract must be governed by the lex contractus or
receipt, VPECI requested Iraq Trade and Economic Development Minister Fadhi proper law of the contract. This is the law voluntarily agreed upon by the parties
Hussein to recall the telex for being in contravention of its mutual agreement that (the lex loci voluntatis) or the law intended by them either expressly or implicitly
the penalty will be held in abeyance until completion of the project. It also wrote (the lex loci intentionis). The law selected may be implied from such factors as
SOB protesting the telex since the Iraqi government lacks foreign exchange to substantial connection with the transaction, or the nationality or domicile of the
pay VPECI and the non-compliance with the 75% billings in US dollars. parties
Philguarantee thus paid US$876,564 to Al Ahli Bank and US$59,129.83 as FACTS:
interest and penalty charges. On 19 June 1991, Philguarantee sent to the 1. This case is an offshoot of a service contract entered into by a Filipino
respondents separate letters demanding full payment of the amount of construction firm with the Iraqi Government for the construction of the
P47,872,373.98 pursuant to their joint and solidary obligations under the deed of
 Institute of Physical Therapy-Medical Center, Phase II, in Baghdad, Iraq, at b. Thus, three layers of guarantees had to be arranged.
a time when the Iran-Iraq war was ongoing. 10. Upon the application of 3-Plex and VPECI, Philguarantee issued in favor of
2. In a complaint filed with the RTC of Makati City, Philippine Export and Al Ahli Bank of Kuwait Letter of Guarantee No. 81-194-F (Performance
Foreign Loan Guarantee Corporation (Philguarantee) sought reimbursement Bond Guarantee) in the amount of ID271,808/610 and Letter of Guarantee
from the respondents of the sum of money it paid to Al Ahli Bank of Kuwait No. 81-195-F (Advance Payment Guarantee) in the amount
pursuant to a guarantee it issued for V.P. Eusebio Construction, Inc. (VPECI). of ID541,608/901, both for a term of eighteen months from 25 May 1981.
3. On 8 November 1980, the State Organization of Buildings (SOB), Ministry 11. These letters of guarantee were secured by
of Housing and Construction, Baghdad, Iraq, awarded the construction of the a. a Deed of Undertaking executed by VPECI, Spouses Vicente P.
Institute of Physical Therapy Medical Rehabilitation Center, Phase II, in Eusebio and Soledad C. Eusebio, 3-Plex, and Spouses Eduardo E.
Baghdad, Iraq, (the Project) to Ajyal Trading and Contracting Company Santos and Iluminada Santos; and
(Ajyal), a firm duly licensed with the Kuwait Chamber of Commerce for a b. a surety bond issued by respondent First Integrated Bonding and
total contract price of ID5,416,089/046 (or about US$18,739,668). Insurance Company, Inc. (FIBICI).
4. On 7 March 1981, spouses Eduardo and Iluminada Santos, in behalf of 3- 12. The Surety Bond was later amended to increase the amount of coverage
Plex International, Inc. (3-Plex), a local contractor engaged in construction from P6.4 million to P6.967 million and to change the bank in whose favor
business, entered into a joint venture agreement with Ajyal wherein the the guarantee was issued, from Rafidain Bank to Al Ahli Bank of Kuwait.
former undertook the execution of the entire Project, while the latter would 13. On 11 June 1981, SOB and the joint venture VPECI and Ajyal executed the
be entitled to a commission of 4% of the contract price. service contract for the construction of the Institute of Physical
5. On 8 April 1981, 3-Plex, not being accredited by or registered with the Therapy Medical Rehabilitation Center, Phase II, in Baghdad, Iraq, wherein
Philippine Overseas Construction Board (POCB), assigned and transferred the joint venture contractor undertook to complete the Project within a period
all its rights and interests under the joint venture agreement to VPECI, a of 547 days or 18 months.
construction and engineering firm duly registered with the POCB. 14. Under the Contract, the Joint Venture would supply manpower and materials,
a. However, 3-Plex and VPECI entered into an agreement that the and SOB would refund to the former 25% of the project cost in Iraqi Dinar
execution of the Project would be under their joint management. and the 75% in US dollars
6. The SOB required the contractors to submit: 15. The construction was delayed and the progress of the construction work was
a. a performance bond of ID271,808/610 representing 5% of the total slow due to some setbacks and difficulties, the Project was not completed
contract price and on 15 November 1982 as scheduled.
b. an advance payment bond of ID541,608/901 representing 10% of 16. But, upon foreseeing the impossibility of meeting the deadline and upon the
the advance payment to be released upon signing of the contract. request of Al Ahli Bank, the joint venture contractor worked for the renewal
7. To comply with these requirements, 3-Plex and VPECI applied for the or extension of the Performance Bond and Advance Payment Guarantee.
issuance of a guarantee with Philguarantee, a government financial Philguarantee’s Performance Bond and Advance Payment Bond with expiry
institution empowered to issue guarantees for qualified Filipino contractors date of 25 November 1982 were then renewed or extended to 9 February
to secure the performance of approved service contracts abroad. 1983 and 9 March 1983, respectively.
8. Philguarantee approved the application. Subsequently, letters of 17. The surety bond was also extended for another period of one year, from 12
guarantee were issued by Philguarantee to the Rafidain Bank May 1982 to 12 May 1983. The Performance Bond was further extended
of Baghdad covering 100% of the performance and advance payment bonds, twelve times with validity of up to 8 December 1986, while the Advance
but they were not accepted by SOB. Payment Guarantee was extended three times more up to 24 May 1984 when
9. What SOB required was a letter-guarantee from Rafidain Bank, the the latter was cancelled after full refund or reimbursement by the joint venture
government bank of Iraq. contractor. The surety bond was likewise extended to 8 May 1987.
a. Rafidain Bank then issued a performance bond in favor of SOB on (Performance Bond was extended for 13 times, Advance Payment Bond was
the condition that another foreign bank, not Philguarantee, would extended for 4 times)
issue a counter-guarantee to cover its exposure. Al Ahli Bank 18. As of March 1986, the Project was 51% accomplished, meaning the
of Kuwait was, therefore, engaged to provide a counter-guarantee to structures were already finished. The remaining 47% consisted in electro-
Rafidain Bank, but it required a similar counter-guarantee in its mechanical works and the 2%, sanitary works, which both required
favor from Philguarantee. importation of equipment and materials.
19. On 26 October 1986, Al Ahli Bank of Kuwait sent a telex call to the 30. On 19 June 1991, Philguarantee sent to the respondents separate letters
Philguarantee demanding full payment of its performance bond counter- demanding full payment of the amount of P47,872,373.98 plus accruing
guarantee. interest, penalty charges, and 10% attorneys fees pursuant to their joint and
20. Upon receiving a copy of that telex message, VPECI requested Iraq Trade solidary obligations under the deed of undertaking and surety bond.
and Economic Development Minister Mohammad Fadhi Hussein to recall the 31. When the respondents failed to pay, Philguarantee filed a civil case for
telex call on the performance guarantee for being a drastic action in collection of a sum of money r before the RTC of Makati City.
contravention of its mutual agreement with the latter that 32. After due trial, the trial court ruled against Philguarantee and held that the
a. the imposition of penalty would be held in abeyance until the latter had no valid cause of action against the respondents.
completion of the project; and a. At the time the call was made on the guarantee which was executed
b. the time extension would be open, depending on the developments for a specific period, the guarantee had already lapsed. There was
on the negotiations for a foreign loan to finance the completion of no valid renewal or extension of the guarantee for failure of
the project. Philguarantee to secure respondents express consent thereto.
21. It also wrote SOB protesting the call for lack of factual or legal basis, since b. The joint venture contractor incurred no delay in the execution of
the failure to complete the Project was due to the Project. Considering the Project owners violations of the
a. the Iraqi governments lack of foreign exchange with which to pay contract which rendered impossible the joint venture contractors
its (VPECIs) accomplishments and performance of its undertaking, no valid call on the guarantee could
b. SOBs noncompliance for the past several years with the provision be made.
in the contract that 75% of the billings would be paid in US dollars. c. no valid notice was first made by the Project owner SOB to the joint
22. On 19 November 1986, VPECI advised Philguarantee not to pay yet Al Ahli venture contractor before the call on the guarantee.
Bank because efforts were being exerted for the amicable settlement. 33. The CA affirmed the RTC.
23. On 14 April 1987, Philguarantee received another telex message from Al
Ahli Bank stating that it had already paid to Rafidain Bank US$876,564 ISSUE/s:
under its letter of guarantee, and demanding reimbursement of what it paid to 1. What law should be applied in determining whether the Joint Venture
the bank plus interest thereon and related expenses. has defaulted? Philippine law, even though the laws of Iraq bear substantial
24. Both Philguarantee and VPECI sought the assistance of some government connection to the transaction, since one of the parties is the Iraqi Government
agencies of the Philippines. and the place of performance is in Iraq. This is because the foreign law was
25. On 10 August 1987, VPECI requested the Central Bank to hold in abeyance not properly pleaded or proved, the presumption of identity or similarity,
the payment by Philguarantee to allow the diplomatic machinery to take its otherwise known as the processual presumption, comes into play
course, for otherwise, the Philippine government , through the Philguarantee 2. WoN Philguarantee is guarantor - Yes The fact that the guarantee issued
and the Central Bank, would become instruments of the Iraqi Government in was unconditional and irrevocable does not make Philguarantee a surety
consummating a clear act of injustice and inequity committed against a 3. WoN VPECI defaulted which justifies resorting to the guaranty – No,
Filipino contractor. VPECI has taken every possible measure for the completion of the project
26. On 27 August 1987, the Central Bank authorized the remittance for its but the war situation in Iraq particularly the lack of foreign exchange is
account of US$876,564 to Al Ahli Bank representing full payment of the proving to be a great obstacle
performance counter-guarantee for VPECIs project in Iraq. 4. WoN Philguarantee should be reimbursed of what it paid to Al Ahli
27. On 6 November 1987, Philguarantee informed VPECI that it would remit Bank – No. Philguarantee should have waited for the natural course of
US$876,564 to Al Ahli Bank, and reiterated the joint and solidary obligation guaranty: the debtor VPECI should have, in the first place, defaulted in its
of the respondents to reimburse for the advances made on its counter- obligation and that the creditor SOB should have first made a demand from
guarantee. the principal debtor. It is only when the debtor does not or cannot pay, in
28. Philguarantee thus paid US$876,564 to Al Ahli Bank of Kuwait. whole or in part, that the guarantor should pay. When it paid against the will
29. Then, on 6 May 1988, Philguarantee paid to Al Ahli Bank of VPECI, the VPECI may set up against it defenses available against the
of Kuwait US$59,129.83 representing interest and penalty charges creditor SOB at the time of payment
demanded by the bank.
RULING: WHEREFORE, the petition for review on certiorari is surety. As a guaranty, it is still characterized by its subsidiary and conditional
hereby DENIED for lack of merit, and the decision of the Court of appeals in CA-G.R. quality because it does not take effect until the fulfillment of the condition,
CV No. 39302 is AFFIRMED. namely, that the principal obligor should fail in his obligation at the time and
in the form he bound himself.
RATIO: 4. In other words, an unconditional guarantee is still subject to the condition that
Philguarantee is a guarantor the principal debtor should default in his obligation first before resort to the
1. By guaranty a person, called the guarantor, binds himself to the creditor to guarantor could be had.
fulfill the obligation of the principal debtor in case the latter should fail to do 5. A conditional guaranty, as opposed to an unconditional guaranty, is one
so. If a person binds himself solidarily with the principal debtor, the contract which depends upon some extraneous event, beyond the mere default of the
is called suretyship. principal, and generally upon notice of the principals default and reasonable
Surety Guaranty diligence in exhausting proper remedies against the principal.
A surety is usually bound with the contract of guaranty is the 6. It appearing that Letter of Guarantee merely stated that in the event of default
his principal by the same guarantor's own separate by VPECI, Philguarantee shall pay, the obligation assumed was simply that
instrument executed at the undertaking often supported by of an unconditional guaranty.
same time and on the same a consideration separate from VPECI did not defaulted in its obligations that would resort to the guaranty
consideration that supporting the contract of 7. A corollary issue is what law should be applied in determining whether the
the principal; the original respondent contractor has defaulted in the performance of its obligations
contract of his principal is not under the service contract. The question of whether there is a breach of an
agreement, which includes default or mora, pertains to the essential or
his contract.
intrinsic validity of a contract.
A surety assumes liability as a the liability of a guarantor is
8. No conflicts rule on essential validity of contracts is expressly provided for
regular party to the undertaking; conditional depending on the
in our laws. The rule followed by most legal systems, however, is that the
failure of the primary debtor to intrinsic validity of a contract must be governed by the lex
pay the obligation contractus or proper law of the contract. This is the law voluntarily agreed
obligation of a surety is primary obligation of a guarantor is upon by the parties (the lex loci voluntatis) or the law intended by them either
secondary expressly or implicitly (the lex loci intentionis). The law selected may be
surety is an original promissor guarantor is charged on his own implied from such factors as substantial connection with the transaction, or
and debtor from the beginning undertaking. the nationality or domicile of the parties.
surety is, ordinarily, held to a guarantor is not bound to take 9. Philippine courts would do well to adopt the first and most basic rule in most
know every default of his notice of the non-performance legal systems, namely, to allow the parties to select the law applicable to
principal of his principal their contract, subject to the limitation that it is not against the law, morals,
a surety will not be discharged A guarantor is often discharged or public policy of the forum and that the chosen law must bear a substantive
either by the mere indulgence of by the mere indulgence of the relationship to the transaction.
the creditor to the principal or creditor to the principal, and is 10. It must be noted that the service contract between SOB and VPECI contains
by want of notice of the default usually not liable unless notified no express choice of the law that would govern it.
of the principal, no matter how of the default of the principal 11. In the United States and Europe, the two rules that now seem to have
much he may be injured thereby emerged as kings of the hill are:
2. The Letter of guarantee by Philguarantee privides a. the parties may choose the governing law; and
a. In the event of default by V.P. EUSEBIO, we shall pay you b. in the absence of such a choice, the applicable law is that of the State
100% of the obligation unpaid but in no case shall such amount that has the most significant relationship to the transaction and the
exceed Iraq Dinars (ID) 271,808/610 plus interest and other parties.
incidental expenses. 12. Another authority proposed that all matters relating to the time, place, and
3. This shows that Philguarantee is a guarantor. The fact that the guarantee manner of performance and valid excuses for non-performance are
issued was unconditional and irrevocable does not make Philguarantee a determined by the law of the place of performance or lex loci
 solutionis, which is useful because it is undoubtedly always connected to the 19. VPECI has taken every possible measure for the completion of the project
contract in a significant way. but the war situation in Iraq particularly the lack of foreign exchange is
13. In this case, the laws of Iraq bear substantial connection to the proving to be a great obstacle. Our performance counterguarantee was
transaction, since one of the parties is the Iraqi Government and the called when the negotiations for a foreign currency loan with the Italian
place of performance is in Iraq. Hence, the issue of whether VPECI government through Banco de Roma bogged down following news report
defaulted in its obligations may be determined by the laws that Iraq has defaulted in its obligation with major European banks. Unless
of Iraq. However, since that foreign law was not properly pleaded or the situation in Iraq is improved as to allay the banks apprehension, there is
proved, the presumption of identity or similarity, otherwise known as no assurance that the project will ever be completed.
the processual presumption, comes into play. Where foreign law is not 20. In order that the debtor may be in default it is necessary that the following
pleaded or, even if pleaded, is not proved, the presumption is that foreign law requisites be present:
is the same as ours. a. that the obligation be demandable and already liquidated;
14. Our law, specifically Article 1169, last paragraph, of the Civil Code, b. that the debtor delays performance; and
provides: In reciprocal obligations, neither party incurs in delay if the other c. that the creditor requires the performance because it must appear
party does not comply or is not ready to comply in a proper manner with what that the tolerance or benevolence of the creditor must have ended.
is incumbent upon him. 21. As stated earlier, SOB cannot yet demand complete performance from
15. It is undisputed that only 51.7% of the total work had been accomplished. The VPECI because it has not yet itself performed its obligation in a proper
48.3% unfinished portion consisted in the purchase and installation of manner, particularly the payment of the 75% of the cost of the Project in US
electro-mechanical equipment and materials, which were available from Dollars. The VPECI cannot yet be said to have incurred in delay. Even
foreign suppliers, thus requiring US Dollars for their importation. assuming that there was delay and that the delay was attributable to VPECI,
16. The monthly billings and payments made by SOB reveal that the agreement still the effects of that delay ceased upon the renunciation by the creditor,
between the parties was a periodic payment by the Project owner to the SOB, which could be implied when it granted several extensions of time to
contractor depending on the percentage of accomplishment within the the former.
period. The payments were, in turn, to be used by the contractor to finance 22. Besides, no demand has yet been made by SOB against the contractor.
the subsequent phase of the work. However, as explained by VPECI in its a. Demand is generally necessary even if a period has been fixed in the
letter to the Department of Foreign Affairs (DFA), the payment by SOB obligation. And default generally begins from the moment the
purely in Dinars adversely affected the completion of the project creditor demands judicially or extra-judicially the performance of
17. The delay or the non-completion of the Project was caused by factors not the obligation. Without such, the effects of default will not arise.
imputable to the contractor. It was rather due mainly to the persistent 23. Moreover, Philguarantee, as a guarantor is entitled to the benefit of excussion,
violations by SOB of the terms and conditions of the contract, particularly its that is, it cannot be compelled to pay the creditor SOB unless the property of
failure to pay 75% of the accomplished work in US Dollars. the debtor VPECI has been exhausted and all legal remedies against the said
a. Indeed, where one of the parties to a contract does not perform in a debtor have been resorted to by the creditor. It could also set up compensation
proper manner the prestation which he is bound to perform under as regards what the creditor SOB may owe the principal debtor VPECI.
the contract, he is not entitled to demand the performance of the 24. However, Philguarantee has clearly waived these rights and remedies by
other party. A party does not incur in delay if the other party fails to making the payment of an obligation that was yet to be shown to be rightfully
perform the obligation incumbent upon him. due the creditor and demandable of the principal debtor.
18. Philguarantee, however, maintains that the payments by SOB of the monthly 25. Philguarantee fully knew that the joint venture contractor had collectibles
billings in purely Iraqi Dinars did not render impossible the performance of from SOB which could be set off with the amount covered by the
the Project by VPECI. Such posture is quite contrary to its previous performance guarantee.
representations in a letter to the Office of the Middle Eastern and African 26. In February 1987, the OMEAA transmitted to Philguaratee a copy of a telex
Affairs (OMEAA), DFA, Manila, petitioners Executive Vice-President Jesus of the Philippine Ambassador in Baghdad, Iraq, informing it of the note
M. Taedo stated that while VPECI had taken every possible measure to verbale sent by the Iraqi Ministry of Foreign Affairs stating that the past due
complete the Project, the war situation in Iraq, particularly the lack of foreign obligations of the joint venture contractor would be deducted from the dues
exchange, was proving to be a great obstacle; thus: of the two contractors.
27. Also, in the project situationer attached to the letter to the OMEAA, conditions, Philguarantee should have exercised prudence and caution under
Philguarantee raised as among the arguments to be presented in support of the circumstances.
the cancellation of the counter-guarantee the fact that ID281,414/066 retained 36. It would be the height of inequity to allow Philguarantee to pass on its losses
by SOB from the Project was more than enough to cover the counter- to the Filipino contractor VPECI which had sternly warned against paying
guarantee of ID271,808/610 the Al Ahli Bank and constantly apprised it of the developments in the Project
28. Since Philguarantee was aware of the contractors outstanding receivables implementation.
from SOB, it should have set up compensation as was proposed in its project
situationer.
29. Moreover, the petitioner was very much aware of the predicament of the
respondents.
30. But surprisingly, though fully cognizant of SOBs violations of the service
contract and VPECIs outstanding receivables from SOB, as well as the
situation obtaining in the Project site compounded by the Iran-Iraq war, it
opted to pay the second layer guarantor not only the full amount of the
performance bond counter-guarantee but also interests and penalty charges.
31. As a rule, a guarantor who pays for a debtor should be indemnified by the
latter and would be legally subrogated to the rights which the creditor has
against the debtor. However, a person who makes payment without the
knowledge or against the will of the debtor has the right to recover only
insofar as the payment has been beneficial to the debtor. If the obligation was
subject to defenses on the part of the debtor, the same defenses which could
have been set up against the creditor can be set up against the paying
guarantor.
32. The payment made by Philguarantee did not in any way benefit the principal
debtor, given the project status and the conditions obtaining at the Project site
at that time.
33. Moreover, the contractor was found to have valid defenses against SOB,
which are fully supported by evidence and which have been meritoriously set
up against the paying guarantor. And even if the deed of undertaking and the
surety bond secured the guaranty, Philguarantee is precluded from enforcing
the same by reason of undue payment on the guaranty. Rights under the deed
of undertaking and the surety bond do not arise because these contracts
depend on the validity of the enforcement of the guaranty.
34. Philguarantee should have waited for the natural course of guaranty: the
debtor VPECI should have, in the first place, defaulted in its obligation and
that the creditor SOB should have first made a demand from the principal
debtor. It is only when the debtor does not or cannot pay, in whole or in part,
that the guarantor should pay. When it paid against the will of VPECI, the
VPECI may set up against it defenses available against the creditor SOB at
the time of payment.
35. As the government arm in pursuing its objective of providing the necessary
support and assistance in order to enable [Filipino exporters and contractors
to operate viably under the prevailing economic and business
 INTERNATIONAL HARVESTER v. HAMBURG (Salve) FACTS:
(cited as the Molina case by Salonga) 1. International Harvester Company in Russia, an American corporation, organized
July 29, 1918 | Street, J. | Contracts under the laws of the State of Maine, delivered to Hamburg-American Line, at
Baltimore, Maryland, to be laden on its steamer the Bulgaria, bound from that
PETITIONER: INTERNATIONAL HARVESTER COMPANY IN RUSSIA port to Hamburg, Germany, a large consignment of agricultural machinery,
RESPONDENTS: HAMBURG-AMERICAN LINE consisting of 852 boxes, crates, and parcels, all of which were to be delivered to
the order of the consignor at Vladivostock, Russia.
SUMMARY: International Harvester, owner of the cargo, delivered to Hamburg- 2. The bill of lading provided, among other things, that the goods should be
American Line a consignment of agricultural machiner. The bill of lading which forwarded by Hamburg-American Line from Hamburg to Vladivostock at the
was issued to International Harvester at Baltimore provided, among other things, ship's expense but at the risk of the owner of the goods.
that the goods should be forwarded by Hamburg-American Line from Hamburg to 3. It was also provided that goods thus destined for points beyond Hamburg should
Vladivostock at the ship's expense but at the risk of the owner of the goods. When be subject to the terms expressed in the customary form of bill of lading in use at
the shipment arrived at Hamburg the Hamburg-American Line transferred the cargo the time of shipment by the carrier completing the transit.
to
the Suevia, a ship of its own line, and issued to itself therefor, as forwarding 4. Hamburg-American Line transferred the cargo to
the Suevia, a ship of its own
agent, another bill of lading in the customary form then in use in the port of line, and issued to itself therefor, as forwarding agent, another bill of lading in the
Hamburg, covering the transportation from Hamburg to Vladivostock. While the customary form then in use in the port of Hamburg, covering the transportation
ship carrying said cargo was in the China Sea en route to Vladivostock war broke from Hamburg to Vladivostock.
out in Europe; and as the Suevia was a German vessel, the master considered it 5. While the ship carrying said cargo was in the China Sea en route to Vladivostock
necessary to take refuge in the nearest neutral port, which happened to be Manila. war broke out in Europe; and as the Suevia was a German vessel, the master
International Harvester made demand upon the agent Hamburg-American Line in considered it necessary to take refuge in the nearest neutral port, which happened
Manila to the effect that it should forward the cargo to Vladivostock, if not by the to be Manila.
Suevia then by some other steamer. Hamburg-American Line refused to do except 6. International Harvester made demand upon the agent Hamburg-American Line in
upon the condition that International Harvester would agree to subject said cargo to Manila to the effect that it should forward the cargo to Vladivostock, if not by the
liability upon general average to satisfy the costs and expenses of the Suevia Suevia then by some other steamer.
incident to its stay in the port of Manila. WoN the cargo belonging to International 7. Hamburg-American Line refused to do except upon the condition that
Harvester is liable to be made to contribute, by way of general average, to the costs International Harvester would agree to subject said cargo to liability upon general
and expenses incurred by reason of the internment of the Suevia in the port of average to satisfy the costs and expenses of the Suevia incident to its stay in the
Manila – NO, the cargo is not liable to a general average because there was no port of Manila.
common danger to the ship and cargo. WoN Hamburg-American Line is liable for 8. International Harvester did not assent and on the contrary demanded the
the expenses of transferring the cargo to another ship and transporting it to the port immediate delivery of the cargo to it in Manila.
of destination – YES, after arrival in Manila, Hamburg refused to discharge the 9. Having thus far failed in its efforts to obtain possession of its property,
goods, thus leaving the obligations intact. Adopted with a view to the preservation International Harvester instituted the present action in the CFI to recover the
of the ship, it can not be permitted that Hamburg-American Line should escape the possession of the cargo, together with damages for breach of contract and
consequences of that act, so far as necessary to effect an equitable adjustment of the unlawful detention of the property.
rights of the owner of the cargo. 10. International Harvester eventually obtained the delivery of the property from the
Suevia by means of a writ of replevin and forwarded it to Vladivostock by another
DOCTRINE: It should be remembered that stipulations, in a bill of lading steamer.
exempting a shipowner from the liability which would ordinarily attach to him 11. Hamburg-American Line denies liability for damages and asserts that it has a lien
under the law are to be strictly construed against him.This rule should be on the property for general average.
unhesitatingly applied in a case such as this where the bill of lading under which 12. Lower court was in favor of International Harvester.
the exemption is claimed was issued by Hamburg-American Line to itself.
ISSUE/s:
12. WoN the cargo belonging to International Harvester is liable to be made to
contribute, by way of general average, to the costs and expenses incurred by
 reason of the internment of the Suevia in the port of Manila – NO, the cargo is not addendum to rule ten to the following effect:
liable to a general average because there was no common danger to the ship and Special — Condition to rule X. — The forwarding of through goods to be
cargo. effected as soon a possible, but the shipowner not to be responsible for delay in
13. WoN Hamburg-American Line is liable for the expenses of transferring the cargo the conveyance. The shipowner to have the liberty to store the goods at the
to another ship and transporting it to the port of destination – YES, after arrival in expense and risk of the owner, shipper or consignee. The shipowner further to
Manila, Hamburg refused to discharge the goods, thus leaving the obligations be entitled to forward the goods by rail from the port of discharge to the final
intact. Adopted with a view to the preservation of the ship, it can not be permitted place of destination, at his expense, but at the risk of the owner, shipper or
that Hamburg-American Line should escape the consequences of that act, so far consignee.
as necessary to effect an equitable adjustment of the rights of the owner of the 4. It is now insisted by Hamburg-American Line that inasmuch a war had broken
cargo. out between Germany and Russia and the mater had brought the cargo into a
neutral harbor, all the obligations of the company have been fulfilled. We think
RULING: The judgment appealed from is affirmed, with costs against the appellant. that this contention is untenable
So ordered. 5. But by the terms of the contract of affreightment the Hamburg-American Line
was bound to forward the cargo to Vladivostock at the steamer's expense, not
RATIO: necessarily by a steamer belonging to the defendant company; and it does not by
any means follow that it is not liable for the expense incurred by the owner in
First Issue completing the unfinished portion of the voyage in another ship.
126. It is not claimed that this agricultural machinery was contraband of war; and being 6. It will be noted that under paragraph X of the bill of lading, quoted above, the
neutral goods, it was not liable to forfeiture in the event of capture by the enemies master is given the election to discharge at another port, if war should interfere
of the ship's flag. It follows that when the master of the Suevia decided to take with the completion of the voyage to the port of destination. No such election has
refuge in the port of Manila, he acted exclusively with a view to the protection of been made by the master. On the contrary, after arrival in Manila, he refused to
his vessel. There was no common danger to the ship and cargo; and therefore it discharge the goods, and must be held to have elected to retain them, leaving the
was not a case for a general average. obligations of the contract intact, except in so far as they were modified, under
the general principle of international law, by the fact that war existed.
Second Issue: 7. It should be remembered that stipulations, in a bill of lading exempting a
shipowner from the liability which would ordinarily attach to him under the law
1. It is noteworthy that the original bill of lading issued to the shipper in Baltimore are to be strictly construed against him
contained the provision that the goods should be forwarded from Hamburn to 8. This rule should be unhesitatingly applied in a case such as this where the bill of
Vladivostock at the steamer's expense and this term appeared not only in the lading under which the exemption is claimed was issued by Hamburg-American
paragraph numbered 17 in the body of the bill of lading but also conspicuously Line to itself.
printed in the shipping direction on the face of the instrument. 9. We find it stated in a well known treatise that where cargo has been taken aboard
2. In the tenth paragraph of the General Rules contained in the bill of lading which a ship at a foreign port and war breaks out between the country to which the vessel
was issued at Hamburn upon account of the Suevia, for the forwarding of the cargo belongs and the country of the port of discharge, the neutral owner of the goods
to Vladivostock, there is found the following provision: cannot complain of her not going to her destination. (Carver, Carriage of Goods
X. If on account of quarantine, threatening quarantine, ice blockade, war by Sea, sec: 239.)
disturbances, strike, lockout, boycott, or reason of a similar nature, the master is 10. It must not be forgotten that the outbreak of the war between Germany and Russia
in doubt as to whether he can safely reach the port of destination, there did not make the contract of affreightment absolutely illegal as between the
discharge in the usual manner, or proceed thence on his voyage unmolested he is German company and the American shipper
at liberty to discharge the goods at another place or harbour which he may 11. The freight was prepaid by the shipper from Baltimore to destination, but has been
consider safe, whereby his obligations are fulfilled. . . . If the goods for any only in part earned. Hamburg-American Line has broken the voyage by stopping
reason whatsoever cannot be discharged . . . at the port of destination, the ship is at the intermediate port of Manila.
at liberty to . . . forward them by some other means to the port of destination, for 12. Admitting that the Hamburg-American Line is absolved from the obligation to
ship's account but not at ship's risk. convey the cargo further on its course, it is nevertheless clear that upon principles
3. Further on in the same bill of lading under the head "Special Clauses" is found an of equity the company should be bound to restore so much of the freight a
 represents the unaccomplished portion of the voyage.
13. If the freight had not been paid, the most that could be claimed by Hamburg-
American Line would be an amount pro rata itineris peracti, as was conceded in
the case of the Teutonia, to which reference has been already made; and now that
the freight has been prepaid, there is a clear obligation on the part of the company
to refund the excess, as money paid upon a consideration that has partially failed.
14. But it will be said that the contract to convey the cargo to Hamburg and to forward
it from there to Vladivostock was an entirety, and that inasmuch as Hamburg-
American Line is absolved from its obligation to proceed further with
performance, there can be no apportionment as between the voyage which has
been accomplished and that which was yet to be performed.
15. The reply to this is that the break in the continuity of the voyage was a result of
the voluntary act of the master of the Suevia, adopted with a view to the
preservation of the ship; and it can not be permitted that Hamburg-American Line
should escape the consequences of that act, so far as necessary to effect an
equitable adjustment of the rights of the owner of the cargo.
16. There being no evidence before us with respect to the amount of freight which
was prepaid, nor with respect to the proportion earned and unearned, but only the
fact that the owner paid out a certain amount for transhipment to Vladivostock, it
can be assumed that this amount approximately represents the unearned portion
of the freight.
17. The only other point raised by the bill of exceptions, which we deem it necessary
to notice, is based on a provision in the bill of lading to the effect that all disputes
arising under the contract are, at the option of the defendant company, to be
decided according to German law and exclusively by the Hamburg courts.
18. It can not be admitted that a provision of this character has the effect of ousting
the jurisdiction of the court of the Philippine Islands in the matter now before it.
An express agreement tending to deprive a court of jurisdiction conferred on it by
law is of no effect.
19. Besides, whatever the effect of this provision, the benefit of it was waived when
Hamburg-American Line appeared and answered generally without objecting to
the jurisdiction of the court.
20. As regards the contention that the rights of the parties should be determined in
accordance with the law of Germany, it is sufficient to say that when it is proposed
to invoke the law of a foreign country as supplying the proper rules for the solution
of a case, the existence of such law must be pleaded and proved.
21. Hamburg-American Line has done neither. In such a case it is to be presumed that
the law prevailing in the foreign country is the same as that which prevails in our
own.
 001 S.S. Lotus Case (France v. Turkey) (Daguman) • Hence, both states here may exercise concurrent jurisdiction over this
September 07, 1927 | PCIJ | Criminal Jurisdiction matter because there is no rule of international law in regards to collision
cases to the effect that criminal proceedings are exclusively within the
PETITIONER: FRANCE: Basdevant, Professor at the Faculty at the Law of jurisdiction of the state whose flag is flown.
Paris
RESPONDENTS: TURKEY: His Excellency Mahmout Essat Bey, Minister of DOCTRINE:
Justice A rule of international law, which prohibits a state from exercising criminal
jurisdiction over a foreign national who commits acts outside of the state’s
SUMMARY national jurisdiction, does not exist.
A collision occurred on the high seas between a French vessel – Lotus – and a
Turkish vessel – Boz-Kourt. The Boz-Kourt sank and killed eight Turkish FACTS:
nationals on board the Turkish vessel. The 10 survivors of the Boz- 55. Aug 2, 1926- S.S. Lotus, A French Steamship, collided on the high seas with
Kourt (including its captain) were taken to Turkey on board the Lotus. In Turkey, Boz-Kourt, a Turkish Collier (ship that transports coal). The Boz Kourt split
the officer on watch of the Lotus (Demons), and the captain of the Turkish ship in two and sank, and 8 of its crew members were killed.
were charged with manslaughter. Demons, a French national, was sentenced to 80 56. Lotus remained to assist the survivors of Boz Kourt, including its captain,
days of imprisonment and a fine. The French government protested, demanding Hassan Bey, and then continued with survivors to Constantinople.
the release of Demons or the transfer of his case to the French Courts. Turkey and 57. Turkish authorities subsequently requested that Lieutenant Demons, the
France agreed to refer this dispute on the jurisdiction to the Permanent Court of officer of the watch on board the Lotus when the collision occurred, come
International Justice (PCIJ). Basically, France went to the Permanent Court of ashore to give evidence.
International Justice (P.C.I.J.) and argued that Turkey did not have jurisdiction to 58. Turkish authorities placed Demons and Hassan Bey under arrest pending trial
try the French officers, because they were on a French boat in international waters on charges of manslaughter. At trial, Demons argued that the Turkish court
at the time of the accident. Turkey argued that since their nationals were killed, lacked jurisdiction, but the court convicted both Demons and Hassan Bey
they had jurisdiction to try those responsible for the deaths. France argued that as with imprisonment for 80 days plus fine.
a matter of customary international law, the flag of the vessel (in this case France) 59. The French Government protested the arrest and the conviction and requested
has exclusive jurisdiction. WoN Turkey violated international law when Turkish that the case be transferred to the French Court.
courts exercised jurisdiction over a crime committed by a French national, outside 60. Turkey proposed, and France agreed, to pose the following question to the
Turkey? NO PCIJ (Permanent Court of International Judges): “Has Turkey acted in
conflict with the principles of international law—and if so, what principles
• A rule of international law, which prohibits a state from exercising by institutiong criminal proceedings in pursuance of Turkish Law against
criminal jurisdiction over a foreign national who commits acts outside of Demons?”
the state’s national jurisdiction, does not exist. 61. The French Govt. invoked the 1923 Convention of Lausanne in arguing
• Failing the existence of a permissive rule to the contrary is the first and against Turkish jurisdiction. Art. 15 of the Convention stated that “all
foremost restriction imposed by international law on a state and it may questions of jurisdiction shall, as between Turkey and other contracting
not exercise its power in any form in the territory of another state. Powers, be decided in accordance with the principles of international law”
• This does not imply that international law prohibits a state from 62. France maintained that such principles precluded criminal jurisdiction in this
exercising jurisdiction in its own territory, in respect of any case that case.
relates to acts that have taken place abroad which it cannot rely on some 63. The French Government contends that the Turkish Courts, in order to have
permissive rule of international law. jurisdiction, should be able to point to some title to jurisdiction recognized
• In this case, it is impossible to hold that there is a rule of international by international law in favor of Turkey.
law that prohibits Turkey from prosecuting Demons because he was 64. On the other hand, the Turkish Government takes the view that Art. 15 allows
aboard a French ship. Turkey jurisdiction whenever such jurisdiction does not come into conflict
• This stems from the fact that the effects of the alleged offense occurred with a principle of international law.
on a Turkish vessel. 65. Basically, France went to the Permanent Court of International Justice
 (P.C.I.J.) and argued that Turkey did not have jurisdiction to try the French 2. Such a view would only be tenable if international law contained a general
officers, because they were on a French boat in international waters at the prohibition to States to extend the application of their laws and the
time of the accident. jurisdiction of their courts to persons, property and acts outside their territory,
66. Turkey argued that since their nationals were killed, they had jurisdiction to and if, as an exception to this general prohibition, it allowed States to do so
try those responsible for the deaths. France argued that as a matter of in certain specific cases.
customary international law, the flag of the vessel (in this case France) has 3. But this is certainly not the case under international law as it stands at present.
exclusive jurisdiction. 4. Far from laying down a general prohibition to the effect that States may not
extend the application of their laws and the jurisdiction of their courts to
ISSUE/s: persons, property and acts outside their territory, it leaves them in this respect
WoN Turkey violated international law when Turkish courts exercised jurisdiction a wide measure of discretion, which is only limited in certain cases by
over a crime committed by a French national, outside Turkey? NO. prohibitive rules; as regards other cases, every State remains free to adopt the
The PCIJ found that Turkey did have the right to try the French sailors. The PCIJ principles which it regards as best and most suitable.
basically found that since the two ships were involved in the same accident, that both 5. This discretion left to States by international law explains the great variety of
countries had concurrent jurisdiction over the accident. The PCIJ found that rules which they have been able to adopt without objections or complaints on
customary international law gave France jurisdiction, but it didn't give the part of other States
them exclusive jurisdiction. "Under international law, everything that isn't prohibited 6. In these circumstances all that can be required of a State is that it should not
is permitted." overstep the limits which international law places upon its jurisdiction; within
these limits, its title to exercise jurisdiction rests in its sovereignty.
7. This applied to civil and criminal cases.
RULING: Judgment in question is affirmed. 8. If the existence of a specific rule was a pre-requisite to exercise jurisdiction,
the Court argued, then “it would… in many cases result in paralysing the
RATIO: action of the courts, owing to the impossibility of citing a universally
accepted rule on which to support the exercise of their [States’] jurisdiction”
A State cannot exercise its jurisdiction outside its territory unless an 9. The Court based this finding on the sovereign will of States.
international treaty or customary law permits it to do so. 10. It held: “International law governs relations between independent States. The
rules of law binding upon States therefor emanate from their own free will as
1. The Court stated: “Now the first and foremost restriction imposed by expressed in conventions or by usages generally accepted as expressing
international law upon a State is that – failing the existence of a permissive principles of law and established in order to regulate the relations between
rule to the contrary – it may not exercise its power in any form in the territory these co-existing independent communities or with a view to the achievement
of another State. of common aims. Restrictions upon the independence of States cannot
2. In this sense, jurisdiction is certainly territorial; it cannot be exercised by a therefore be presumed”
State outside its territory except by virtue of a permissive rule derived from
international custom or from a convention.” Criminal Jurisdiction: Territorial Jurisdiction (TOPIC)

Within its territory, a State may exercise its jurisdiction, in any matter, even if there 1. France alleged that the flag State of a vessel has exclusive jurisdiction over
is no specific rule of international law permitting it to do so. In these instances, offences committed on board the ship in high seas.
States have a wide measure of discretion, which is only limited by the prohibitive 2. The Court disagreed.
rules of international law. 3. It held that France, as the flag State, did not enjoy exclusive territorial
jurisdiction in the high seas in respect of a collision with a vessel carrying
1. The Court stated that: “It does not, however, follow that international law the flag of another State.
prohibits a State from exercising jurisdiction in its own territory, in respect 4. Turkey and France both have jurisdiction in respect of the whole incident: in
of any case which relates to acts which have taken place abroad, and in which other words, there was concurrent jurisdiction.
it cannot rely on some permissive rule of international law. 5. The Court held that a ship in the high seas is assimilated to the territory of the
flag State.
 6. This State may exercise its jurisdiction over the ship, in the same way as it
exercises its jurisdiction over its land, to the exclusion of all other States.
7. In this case, the Court equated the Turkish vessel to Turkish territory.
8. The Court held: “… offence produced its effects on the Turkish vessel and
consequently in a place assimilated to Turkish territory in which the
application of Turkish criminal law cannot be challenged, even in regard to
offences committed there by foreigners.” The Court concluded that Turkey
had jurisdiction over this case.
9. It further said: “If, therefore, a guilty act committed on the high seas produces
its effects on a vessel flying another flag or in foreign territory, the same
principles must be applied as if the territories of two different States were
concerned, and the conclusion must therefore be drawn that there is no rule
of international law prohibiting the State to which the ship on which the
effects of the offence have taken place belongs, from regarding the offence
as having been committed in its territory and prosecuting, accordingly, the
delinquent.”
10. The Lotus Case is also significant in that the Court said that a State would
have territorial jurisdiction, even if the crime was committed outside its
territory, so long as a constitutive element of the crime was committed in that
State.

Subjective Territorial Jurisdiction

1. In order for subjective territorial jurisdiction to be established, one must

prove that the element of the crime and the actual crime are entirely
inseparable: in other words, if the constituent element was absent – the
crime would not have happened.
2. The Court said: “The offence for which Lieutenant Demons appears to have
been prosecuted was an act – of negligence or imprudence – having its origin
on board the Lotus, whilst its effects made themselves felt on board the Boz-
Kourt. These two elements are, legally, entirely inseparable, so much so that
their separation renders the offence non-existent… It is only natural that each
should be able to exercise jurisdiction and to do so in respect of the incident
as a whole. It is therefore a case of concurrent jurisdiction.”
 002 Filartiga v. Peña-Irala (DAYU) 3. Filartigas brought this action in Eastern District of New York against
June 30, 1980 | Kaufman, J. | Tort and Crimes Americo Pena, also a citizen of Paraguay, for wrongfully causing the death
of Dr. Filartiga’s 17 y/o son, Joelito.
PETITIONER: Dolly M. E. Filartiga and Joel Filartiga 4. Filargitas contend that on March 29, 1976, Joelito was kidnapped and
RESPONDENTS: Americo Norberto Peña-Irala tortured to death by Pena, who was then Inspector General of Police in
Asuncion, Paraguay.
SUMMARY: [note: this is a decision by the US CA] Joel and Dolly Filartiga— 5. Later that day, police brought Dolly to Pena’s home where she was
Citizens of Paraguay—filed an action in the US against Pena—another citizen of confronted with the body of her brother, which evidenced marks of severe
Paraguay, for wrongfully causing the death of Joelito, who was allegedly tortured torture.
and killed in retaliation for Joel’s political actions and beliefs. The district court 6. Filargitas claim that Joelito was tortured and killed in retaliation for Dr. Joel’s
dismissed the action for want of subject matter jurisdiction because it felt political activities and beliefs.
constrained to narrowly construe the "law of nations" as employed in the Alien 7. Dr. Joel commenced criminal action in Paraguayan courts against Pena and
Tort Statute, which provides that “The district courts shall have original the police for murder of Joelito. As a result, Dr. Joel’s attorney was arrested
jurisdiction of any civil action by an alien for a tort only, committed in violation and brought to police headquarters where, shackled to a wall, Pena threatened
of the law of nations or a treaty of the U.S.” him with death. This attorney, it is alleged, has since been disbarred without
just cause.
Issue is w/n the “law of nations” was violated—YES, the prohibition against 8. During the course of Paraguayan criminal proceeding (which is still pending
torture has now become part of customary international law and may be after 4 years), another man—Hugo Duarte—confessed to the murder.
considered to violate the law of nations. Therefore, federal jurisdiction is proper 9. Duarte, a member of the Pena household (son of Pena’s companion—Juana),
pursuant to ATS. claimed that he had discovered his wife and Joelito in flagrante delicto, and
that the crime was one of passion.
Please read the whole case digest L Sorry it’s long, naguguluhan rin ako, I tried 10. Despite confession, Duarte has never been convicted or sentenced in
huhu, but apparently landmark case talaga siya. But this is really the gist lang, connection with the crime.
since torture is now against the law of nations, then the courts may have 11. July 1978—Pena sold his house in Paraguay and entered US under visitor’s
jurisdiction over torts committed within the US or abroad pursuant to the ATS. visa. Juana Bautista Fernandez Villalba, who had lived with him in Paraguay,
accompanied him.
DOCTRINE: 12. The couple remained in the US beyond the term of their visas and was living
ATS does not grant new rights to aliens, but is simply an opening to the federal in Brooklyn, NY, when Dolly, who was then living in Washington, D.C.,
courts for adjudication of the rights already recognized by international law. learned of their presence.
Deliberate torture perpetrated under color of official authority violates 13. Acting on information provided by Dolly, the Immigration and Naturalization
universally accepted norms of the international law of human rights, regardless Service arrested Pena and Juana. Both were ordered deported on April 5,
of the nationality of the parties. Thus, whenever an alleged torturer is found and 1979 following a hearing. They had then resided in the US for more than 9
served with process by an alien within US borders, ATS provides federal months.
jurisdiction. [Doctrine in online case digest] 14. Almost immediately, Dolly caused Pena to be served with summons and civil
complaint at the Brooklyn Navy Yard [where he was being held pending
deportation].
FACTS:
15. Complaint alleged that Pena wrongfully caused Joelito’s death by torture and
1. Plaintiffs Dolly and Joel Filartiga are citizens of the Republic of Paraguay.
sought compensatory and punitive damages of 10M USD.
Dr. Joel—a physician—describes himself as a longstanding opponent of the
16. Filartigas also sought to enjoy Pena’s deportation to ensure his availability
government of Pres. Alfredo Stroessner, which has held power in Paraguay
for testimony at trial.
since 1954.
17. The cause of action is stated as arising under “wrongful death statutes; the
2. Dolly (Dr. Joel’s daughter) arrived in the US in 1978 under a visitor’s visa
UN Charter; the UDHR; the UN Declaration against Troture; the American
and has sice applied for permanent political asylum.
Declaration of the Rights and Duties of Man; and other pertinent declarations,
documents and practices constituting the customary international law of
 human rights and the law of nations,” as well as 28 U.S.C. s 1350, Art. II, of the nations in the world (in principle if not in practice), we find that an act
sec. 2 and the Supremacy Clause of the US Constitution. of torture committed by a state official against one held in detention violated
18. Jurisdiction is claimed under the general federal question provision, 28 established norms of the international law of human rights, and hence the law
U.S.C. s 1331 and, principally on this appeal, under the Alien Tort Statute, of nations.
28 U.S.C. s 1350 [“ATS”].
19. Judge Nickerson (district judge) stayed the order of deportation. Pena moved RULING: Action remanded for further proceedings.
to dismiss complaint on the grounds that (1) subject matter jurisdiction was
absent and for (2) forum non conveniens. RATIO:
20. On jurisdictional issue, there has been no suggestion that Pena claims 110. The SC has enumerated the appropriate sources of IL. The law of nations
diplomatic immunity from suit. “may be ascertained by consulting the works of jurists, writing professedly
21. Filartigas submitted affidavits of number of distinguished international legal on public law; or by the general usage and practice of nations; or by judicial
scholars who stated unanimously that the law of nations prohibits absolutely decisions recognizing and enforcing that law.”
the use of torture as alleged in the complaint. 111. The Paquete Habana case, reaffirmed that where there is no treaty, and no
22. Pena, in support of his motion to dismiss on the ground of forum non controlling executive or legislative act or judicial decision, resort must be had
conveniens, submitted the affidavit of his Paraguayan counsel, Jose Emilio to the customs and usages of civilized nations; and, as evidence of these, to
Gorostiaga, who averred that Paraguayan law provides a full and adequate the works of jurists and commentators, who by years of labor, research and
civil remedy for the wrong alleged.88 experience, have made themselves peculiarly well acquainted with the
23. Believing that further resort to the courts of his own country would be futile, subjects of which they treat. Such works are resorted to by judicial tribunals,
Dr. Joel has not commenced such an action. not for the speculations of their authors concerning what the law ought to be,
24. May 15, 1979—Judge Nickerson dismissed complaint on jurisdictional but for trustworthy evidence of what the law really is.
grounds. Recognized strength of Filartigas’ argument that official torture 112. Habana is particularly instructive for present purposes, for it held that the
violates an emerging norm of customary international law. Nonetheless, felt traditional prohibition against seizure of an enemy’s coastal fishing vessels
constrained by dicta contained in recent opinions89 of this Court to construe during wartime, a standard that began as one of comity only, had ripened over
narrowly “the law of nations,” as employed in s. 1350, as excluding that the preceding century into “a settled rule of international law” by “the general
law which governs a state’s treatment of its own citizens. assent of civilized nations.”
25. District court continued the stay of deportation for 48 hours while Filartigas 113. Courts must interpret IL as it has evolved and exists among the nations of the
applied for further stays. Denied by SC. world today.
26. Shortly after, Pena and Juana returned to Paraguay. 114. The requirement that a rule command the “general assent of civilized nations”
27. Filartigas rest their principal argument in support of federal jurisdiction upon to become binding upon them all is a stringent one. Were this not so, the
the Alien Tort Statute (28 U.S.C. s 1350), which provides: “The district courts of one nation might feel free to impose idiosyncratic legal rules upon
courts shall have original jurisdiction of any civil action by an alien for others, in the name of applying international law.
a tort only, committed in violation of the law of nations or a treaty of the 115. There are few, if any, issues in international law today on which opinion
U.S.” seems to be so united as the limitations on a state’s power to torture persons
28. Since Filartigas do not contend that their action arises directly under a treaty held in its custody.
of the US, a threshold question on the jurisdictional issue is whether the 116. The UN Charter makes it clear that in this modern age a state’s treatment of
conduct alleged violated the law of nations. its own citizens is a matter of international concern.
117. Although there is no universal agreement as to the precise extent of the
ISSUE/s: “human rights and fundamental freedoms” guaranteed to all by the Charter,
16. WoN the conduct alleged violated the law of nations—YES, in light of the there is at present no dissent from the view that the guaranties include, at a
universal condemnation of torture in numerous international agreements, and bare minimum, the right to be free from torture.
the renunciation of torture as an instrument of official policy by virtually all

88
The Gorostiaga affidavit states that a father whose son has been wrongfully killed may in addition to 89
Dreyfus v. von Finck; IIT v. Vencap, Ltd., à take note, these cases will be discussed later in the body!
commencing a criminal proceeding bring a civil action for damages against the person responsible.
118. This prohibition has become part of customary international law, as 130. The treaties and accords cited above, as well as the express foreign policy of
evidenced and defined by the UDHR, GA Res. 217 (III)(A) which states, “no our own government, all make it clear that international law confers
one shall be subjected to torture.” The General Assembly has declared that fundamental rights upon all people vis-a-vis their own governments. While
the Charter precepts embodied in this Universal Declaration “constitute basic the ultimate scope of those rights will be a subject for continuing refinement
principles of international law.” and elaboration, we hold that the right to be free from torture is now among
119. Particularly relevant is the Declaration on the Protection of All Persons from them.
Being Subjected to Torture, General Assembly Resolution 3452. The
Declaration expressly prohibits any state from permitting the dastardly and 131. Pena submits that even if the tort alleged is a violation of modern international
totally inhuman act of torture. law, federal jurisdiction may not be exercised consistent with the dictates of
120. Torture is defined as “any act by which severe pain and suffering, whether Art. III of the Constitution. à This claim is without merit.
physical or mental, is intentionally inflicted by or at the instigation of a public 132. Common law courts of general jurisdiction regularly adjudicate transitory tort
official on a person for such purposes as . . . intimidating him or other claims between individuals over whom they exercise personal jurisdiction,
persons.” The Declaration goes on to provide that “where it is proved that an wherever the tort occurred.
act of torture or other cruel, inhuman or degrading treatment or punishment 133. Moreover, Congress provided for federal jurisdiction over suits by aliens
has been committed by or at the instigation of a public official, the victim where principles of international law are in issue. The constitutional basis for
shall be afforded redress and compensation, in accordance with national law.” the Alien Tort Statute is the law of nations, which has always been part of the
This Declaration, like the Declaration of Human Rights before it, was federal common law.
adopted without dissent by the General Assembly. 134. It is not extraordinary for a court to adjudicate a tort claim arising outside of
121. Moreover, a U.N. Declaration is “a formal and solemn instrument, suitable its territorial jurisdiction. A state or nation has a legitimate interest in the
for rare occasions when principles of great and lasting importance are being orderly resolution of disputes among those within its borders, and where the
enunciated. lex loci delicti commissi is applied, it is an expression of comity to give effect
122. The UDHR no longer fits into the dichotomy of ‘binding treaty’ against ‘non- to the laws of the state where the wrong occurred.
binding pronouncement,’ but is rather an authoritative statement of the 135. Thus, Lord Mansfield in Mostyn v. Fabrigas, quoted in McKenna v. Fisk: “If
international community. A becomes indebted to B, or commits a tort upon his person or upon his
123. Thus, a Declaration creates an expectation of adherence, and insofar as the personal property in Paris, an action in either case may be maintained against
expectation is gradually justified by State practice, a declaration may by A in England, if he is found…As to transitory actions, there is not a colour of
custom become recognized as laying down rules binding upon the States. doubt but that any action which is transitory may be laid in any country in
124. Indeed, several commentators have concluded that the UDHR has become, in England, though the matter arises beyond the seas.”
toto, a part of binding, customary international law. 136. Mostyn came into our law as the original basis for state court jurisdiction over
out-of-state torts, and it has not lost its force in suits to recover for a wrongful
125. Although torture was once a routine concomitant of criminal interrogations death occurring upon foreign soil, as long as the conduct complained of was
in many nations, during the modern and hopefully more enlightened era it has unlawful where performed.
been universally renounced. 137. Here, where in personam jurisdiction has been obtained over the defendant,
126. Torture is prohibited, expressly or implicitly, by the constitutions of over the parties agree that the acts alleged would violate Paraguayan law, and the
fifty-five nations, including both the US and Paraguay. policies of the forum are consistent with the foreign law, state court
127. Having examined the sources from which customary international law is jurisdiction would be proper.
derived the usage of nations, judicial opinions and the works of jurists we 138. Recalling that Mostyn was freshly decided at the time the Constitution was
conclude that official torture is now prohibited by the law of nations. ratified, we proceed to consider whether the First Congress acted
128. The prohibition is clear and unambiguous, and admits of no distinction constitutionally in vesting jurisdiction over “foreign suits,” alleging torts
between treatment of aliens and citizens. committed in violation of the law of nations.
129. Accordingly, we must conclude that the dictum in Dreyfus v. von Finck, to 139. A case properly “arises under the…laws of the United States” for Article III
the effect that “violations of international law do not occur when the purposes if grounded upon statutes enacted by Congress or upon the common
aggrieved parties are nationals of the acting state,” is clearly out of tune with law of the United States.
the current usage and practice of international law. 140. The law of nations forms an integral part of the common law, and a review
 of the history surrounding the adoption of the Constitution demonstrates that merely several, concern, by means of express international accords, that a
it became a part of the common law of the US upon the adoption of the wrong generally recognized becomes an international law violation within
Constitution. the meaning of the statute.
141. Therefore, enactment of the ATS was authorized by Art. III. 153. A violation of the law of nations arises only when there has been ‘a violation
142. The judiciary article contained no express reference to cases arising under the by one or more individuals of those standards, rules or customs (a) affecting
law of nations. The only express reference to that body of law is contained in the relationship between states or between an individual and a foreign state
Article I, sec. 8, cl. 10, which grants to the Congress the power to “define and and (b) used by those states for their common good and/or in dealings inter
punish…offenses against the law of nations.” se.
143. Pena and Juana seize upon this circumstance and advance the proposition that 154. The sphere of domestic jurisdiction is not an irreducible sphere of rights
the law of nations forms a part of the laws of the US only to the extent that which are somehow inherent, natural, or fundamental. It does not create an
Congress has acted to define it. impenetrable barrier to the development of international law. Matters of
144. This extravagant claim is amply refuted by the numerous decisions applying domestic jurisdiction are not those which are unregulated by international
rules of international law uncodified in any act of Congress. law, but those which are left by international law for regulation by States.
145. Federal jurisdiction over cases involving international law is clear. Thus, it There are, therefore, no matters which are domestic by their ‘nature.’ All are
was hardly a radical initiative for Chief Justice Marshall to state in The susceptible of international legal regulation and may become the subjects of
Nereide, that in the absence of a congressional enactment, US courts are new rules of customary law of treaty obligations.
“bound by the law of nations, which is a part of the law of the land.” 155. Here, the nations have made it their business, both through international
146. These words were echoed in Habana, “international law is part of our law, accords and unilateral action, to be concerned with domestic human rights
and must be ascertained and administered by the courts of justice of violations of this magnitude. The case before us therefore falls within the IIT
appropriate jurisdiction, as often as questions of right depending upon it are rule.
duly presented for their determination.” 156. Federal jurisdiction may properly be exercised over the Filartigas’ claim.

147. The Filartigas urge that ATS be treated as an exercise of Congress’ power to 157. Pena argues that the customary law of nations, as reflected in treaties and
define offenses against the law of nations. While such a reading is possible, declarations that are not self-executing, should not be applied as rules of
we believe it is sufficient here to construe the ATS, not as granting new rights decision in this case.
to aliens, but simply as opening the federal courts for adjudication of the 158. In doing so, he confuses the question of federal jurisdiction under the ATS,
rights already recognized by international law. which requires consideration of the law of nations, with the issue of the
148. Although the ATS has rarely been the basis for jurisdiction during its long choice of law to be applied, which will be addressed at a later stage in the
history, in light of the foregoing discussion, there can be little doubt that this proceedings.
action is properly brought in federal court. 159. The two issues are distinct. Our holding on subject matter jurisdiction decides
149. This is undeniably an action by an alien, for a tort only, committed in only whether Congress intended to confer judicial power, and whether it is
violation of the law of nations. The paucity of suits successfully maintained authorized to do so by Art. III. The choice of law inquiry is a much broader
under the section is readily attributable to the statute’s requirement of one, primarily concerned with fairness—it looks to wholly different
alleging a “violation of the law of nations” at the jurisdictional threshold. considerations.
150. The narrowing construction that the ATS has previously received reflects the 160. Pena also argues that “if the conduct complained of is alleged to be the act of
fact that earlier cases did not involve such well-established, universally the Paraguayan government, the suit is barred by the Act of State doctrine.”
recognized norms of international law that are here at issue. This argument was not advanced below, and is therefore not before us on this
151. For example, the statute does not confer jurisdiction over an action by a appeal.
Luxembourgeois international investment trust’s suit for fraud, conversion 161. We note in passing, however, that we doubt whether action by a state official
and corporate waste (IIT v. Vencap). in violation of the Constitution and laws of the Republic of Paraguay, and
152. In IIT, Judge Friendly noted that the mere fact that every nation’s municipal wholly unratified by that nation’s government, could properly be
law may prohibit theft does not incorporate “the Eighth Commandment, characterized as an act of state.
‘Thou Shalt not steal’ . . . (into) the law of nations.” It is only where the 162. Paraguay’s renunciation of torture as a legitimate instrument of state policy,
nations of the world have demonstrated that the wrong is of mutual, and not however, does not strip the tort of its character as an international law
 violation, if it in fact occurred under color of government authority.
163. Finally, we have already stated that we do not reach the critical question of
forum non conveniens, since it was not considered below.
 IN RE ESTATE OF FERDINAND MARCOS (Eleazar) jurisdictional grant of Sec. 1350.
June 16, 1994 | Judge Tang | Torts and Crimes
WoN the court was within the authority to preliminarily enjoin the estate from
PETITIONERS: Maximo HILAO, et al., Class Plaintiffs; Vicente Clemente, et transferring or dissipating its assets pending suit? – YES, the grant of a preliminary
al., Class Plaintiffs; Jaime Piopongco, et al., Class Plaintiffs. Plaintiffs-Appellees injunction will be reversed only if the lower court abused its discretion or based
its decision on an erroneous legal standard or clearly erroneous findings of fact.
RESPONDENTS: ESTATE OF Ferdinand MARCOS The district court found a substantial likelihood that plaintiffs would succeed
on the merits. In fact, the plaintiffs have since prevailed at trial on liability
SUMMARY: Defendant Estate of Ferdinand Marcos appeals from the district and have been awarded substantial exemplary damages. The court further
court's order preliminarily enjoining the Estate from transferring, secreting or found that plaintiffs would be irreparably injured and that the remedies at
dissipating the Estate's assets pendente lite. During Ferdinand Marcos' tenure as law were not adequate if the injunction were denied
President of the Philippines, up to 10,000 people in the Philippines were
allegedly tortured, summarily executed or disappeared at the hands of military DOCTRINE: The prohibition against official torture carries with it the force of a
intelligence personnel acting pursuant to martial law declared by Marcos in 1971. jus cogens norm, which enjoys the highest status within international law.
Marcos, his family, Ver and others loyal to Marcos fled to Hawaii in February,
1986. One month later, a number of lawsuits were filed against Marcos, Ver, FACTS:
and/or Imee Marcos- Manotoc, claiming that the plaintiffs had been arrested and 1. Defendant Estate of Ferdinand Marcos ("the Estate") appeals from the district
tortured, or were the families of people arrested, tortured, and executed between court's order preliminarily enjoining the Estate from transferring, secreting or
1971 and 1986. On February 23, 1994, the jury awarded the plaintiffs $1.2 billion dissipating the Estate's assets pendente lite.
in exemplary damages. The jury will reconvene to determine compensatory 2. On this interlocutory appeal, the Estate also challenges the district court's
damages. subject matter jurisdiction under the Foreign Sovereign Immunities Act and
Alien Tort Act, claims that the plaintiffs do not state a cause of action, and
WoN tort claims for personal injuries or wrongful death abate upon the death of contends that any cause of action abated upon Marcos' death. We have
either the plaintiff or the defendant – NO, the plaintiff’s claim survives jurisdiction and affirm.
notwithstanding the death of Ferdinand Marcos. The choice of law inquiry is 3. During Ferdinand Marcos' tenure as President of the Philippines, up to
primarily concerned with fairness. Despite the fact that plaintiffs' cause of 10,000 people in the Philippines were allegedly tortured, summarily
action arises under the Alien Tort Act, plaintiffs' claims are most closely executed or disappeared at the hands of military intelligence personnel
analogous to a claim that government officials violated the Eighth acting pursuant to martial law declared by Marcos in 1971.
Amendment right of freedom from cruel and unusual punishment, torture is 4. Military intelligence allegedly operated under the authority of Marcos,
prohibited by the Eighth Amendment, which does not abate upon the death of the General Fabian Ver, and Imee Marcos-Manotoc (Ferdinand Marcos'
defendant. daughter).
5. Marcos, his family, Ver and others loyal to Marcos fled to Hawaii in
WoN this action does not fall within the excpetions under the Foreign Sovereign
February, 1986. One month later, a number of lawsuits were filed against
Immunities Act (FSIA), thus, should be dismissed? – NO, the Court has have
Marcos, Ver, and/or Imee Marcos- Manotoc, claiming that the plaintiffs had
previously rejected the Estate's argument that FSIA immunizes alleged acts of
been arrested and tortured, or were the families of people arrested, tortured,
torture and execution by a foreign official. Marcos' acts of torture, execution, and
and executed between 1971 and 1986.
disappearance were clearly acts outside of his authority as President. Like those
6. All actions were dismissed by district courts on the "act of state" defense; we
of Marcos-Manotoc, Marcos' acts were not taken within any official mandate
reversed and remanded in an unpublished decision. The Judicial Panel on
and were therefore not the acts of an agency or instrumentality of a foreign
Multi-District Litigation then consolidated all cases in the District of Hawaii
state meaning of FSIA. No exception to FSIA thus need be demonstrated.
on September 5, 1990. The case was certified as a class action on April 8,
WoN the action is within the jurisdictional grant of the Alien Tort Act (Sec. 1350) 1991, and a consolidated amended complaint naming the Estate as a
– YES, a suit as an alien for the tort of wrongful death, committed by military defendant was filed on behalf of the class.
intelligence officials through torture prohibited by the law of nations, is within the 7. Default was entered against Imee Marcos-Manotoc in 1986 in Trajano v.
Marcos, one of the individual cases consolidated in this action. In 1991,
 Marcos-Manotoc moved to set aside the default and moved to dismiss for transferring or dissipating its assets pending suit? – YES, the grant of a
lack of subject matter jurisdiction under the Alien Tort Act and immunity preliminary injunction will be reversed only if the lower court abused its
under the Foreign Sovereign Immunities Act. The motions were denied, and discretion or based its decision on an erroneous legal standard or clearly
judgment was entered against Marcos-Manotoc. We affirmed on appeal. erroneous findings of fact.
8. On November 1, 1991, the plaintiffs moved for a preliminary injunction
to prevent the Estate from transferring or secreting any assets in order RULING: AFFIRMED.
to preserve the possibility of collecting a judgment. The Estate had earlier
been enjoined from transferring or secreting assets in an action brought by RATIO:
the Republic of the Philippines against Ferdinand Marcos. That preliminary First Issue: Survival of the Action
injunction had been appealed, and was affirmed. When the preliminary
injunction in that case was dissolved due to a settlement, the plaintiffs in this 1. The Estate argues that tort claims for personal injuries or wrongful death
action immediately sought the continuation of that injunction. The district abate upon the death of either the plaintiff or the defendant.
court granted the motion. 2. The Estate cites Heikkila v. Barber, in which this court held that the plaintiff's
9. Pending this interlocutory appeal of the preliminary injunction, trial on claim seeking to hold the defendant in contempt for wrongfully deporting the
liability proceeded. On September 24, 1992, the jury rendered a verdict plaintiff, and seeking damages therefor, did not survive the plaintiff's death.
in favor of the class and the individually-named plaintiffs (except for The court held that Heikkila's claim most closely resembled the tort of
plaintiff Wilson Madayag). unlawful imprisonment, false arrest, or trespass to his person, and at common
10. The Estate's motion for JNOV was denied, and judgment was entered in
90
law actions for tort did not survive the death of a party. Refusing to apply
favor of the prevailing plaintiffs. The preliminary injunction was modified on state law for the survival of actions, the court stated, "A cause of action
November 16, 1993, to set forth the jury verdict on liability, to compel the which is given by a federal statute, if no specific provision is made by act
legal representatives of the Estate to fully and completely answer plaintiffs' of Congress for its survival, survives or not according to the principles
interrogatories regarding the assets of the estate, to name the Swiss banks at of the common law."
which the Marcoses had deposited monies as representatives of the Estate, 3. "The choice of law inquiry is primarily concerned with fairness.” Despite
and to permit the plaintiffs to take discovery regarding these assets. the fact that plaintiffs' cause of action arises under the Alien Tort Act,
11. On February 23, 1994, the jury awarded the plaintiffs $1.2 billion in plaintiffs' claims are most closely analogous to a claim that government
exemplary damages. The jury will reconvene to determine compensatory officials violated the Eighth Amendment right of freedom from cruel and
damages. unusual punishment, torture is prohibited by the Eighth Amendment, which
does not abate upon the death of the defendant. A cause of action for an
ISSUE/s Eighth Amendment violation survives the death of a party.
1. WoN tort claims for personal injuries or wrongful death abate upon the death 4. Alternatively, a Sec. 1350 action is closely analogous to a violation of Claims
of either the plaintiff or the defendant – NO, the plaintiff’s claim survives for tortious conduct of government officials which may be analogized to
notwithstanding the death of Ferdinand Marcos. domestic lawsuits brought under 42 U.S.C. Sec. 1983, where plaintiffs must
2. WoN this action does not fall within the excpetions under the Foreign allege both deprivation of a federally protected right and action 'under color
Sovereign Immunities Act (FSIA), thus, should be dismissed? – NO, the of state law.").
Court has have previously rejected the Estate's argument that FSIA 5. In conclusion, the plaintiffs' claims survive the death of Ferdinand
immunizes alleged acts of torture and execution by a foreign official Marcos.
3. WoN the action is within the jurisdictional grant of the Alien Tort Act (Sec.
1350) – YES, a suit as an alien for the tort of wrongful death, committed by Second Issue: Falls Under the Exceptions to FSIA, thus, NO IMMUNITY
military intelligence officials through torture prohibited by the law of nations,
is within the jurisdictional grant of Sec. 1350. 1. The Foreign Sovereign Immunities Act ("FSIA") is the sole basis for
4. WoN the court was within the authority to preliminarily enjoin the estate from obtaining jurisdiction over a foreign state and its agencies or

90
JNOV means: Judgment non obstante veredicto = judgment notwithstanding the
verdict
 instrumentalities. Subject matter jurisdiction against a foreign state depends 7. This interpretation is consistent with FSIA's codification of the "restrictive"
on the existence of one of the exceptions to immunity set forth in FSIA. principle of sovereign immunity in international law, which limits the
2. The Estate argues that this action does not fall within any of the articulated immunity of a foreign state to its "inherently governmental or 'public' acts,"
exceptions to immunity and should therefore be dismissed. In particular, the but does not extend to suits based on its commercial or private acts.
Estate argues that under 28 U.S.C. Sec. 1605(a)(5)3, a foreign state is 8. Immunity is extended to an individual only when acting on behalf of the state
immune to damages for personal injury or death unless it occurs in the United because actions against those individuals are "the practical equivalent of a
States. suit against the sovereign directly."
3. However, we have previously rejected the Estate's argument that FSIA 9. A lawsuit against a foreign official acting outside the scope of his authority
immunizes alleged acts of torture and execution by a foreign official. On does not implicate any of the foreign diplomatic concerns involved in
appeal from entry of default judgment against Imee Marcos-Manotoc, we bringing suit against another government in United States courts.
rejected Marcos-Manotoc's assertion that she was entitled to sovereign 10. This is evidenced by the Philippine government's agreement that the suit
immunity because her challenged actions were premised on her authority as against Marcos proceed. The Minister of Justice of the Republic of the
a government agent. In Chuidian v. Philippine Nat'l Bank, 912 F.2d 1095 (9th Philippines, Neptali A. Gonzales, prepared a letter to the Deputy
Cir.1990), we had held that FSIA does not immunize a foreign official Minister of Foreign Affairs, Leticia R. Shahani, concluding that
engaged in acts beyond the scope of his authority: "Marcos may be held liable for acts done as President during his
a. Where the officer's powers are limited by statute, his actions beyond incumbency, when such acts, like torture, inhuman treatment of
those limitations are considered individual and not sovereign detainees, etc. are clearly in violation of existing law ... the government
actions. or its officials may not validly claim state immunity for acts committed
b. The officer is not doing the business which the sovereign has against a private party in violation of existing law” The Republic also filed
empowered him to do. an amicus curiae brief in the appeal from the dismissals on "act of state"
4. We held that upon default, Marcos-Manotoc admitted that she acted on grounds which urged the Ninth Circuit to reverse the district courts. The
her own authority, not that of the Republic of the Philippines. Her acts Republic stated that "foreign relations with the United States will not be
were not taken within any official mandate and were therefore not the acts of adversely affected if these human rights claims against Ferdinand Marcos are
an agency or instrumentality of a foreign state within the meaning of FSIA. heard in U.S. courts."
5. Like Marcos-Manotoc, the Estate argues that Marcos' acts were premised on 11. In conclusion, Marcos' acts of torture, execution, and disappearance were
his official authority, and thus fall within FSIA. However, because the clearly acts outside of his authority as President. Like those of Marcos-
allegations of the complaint are taken as true for purposes of determining Manotoc, Marcos' acts were not taken within any official mandate and were
whether an action should be dismissed, Siderman, 965 F.2d at 706, Marcos' therefore not the acts of an agency or instrumentality of a foreign state within
actions should be treated as taken without official mandate pursuant to his the meaning of FSIA. No exception to FSIA thus need be demonstrated.
own authority.
6. Moreover, in Republic of the Philippines, we held that Marcos' alleged illegal Third Issue: Action is Within the Jurisdictional Grant of Alien Tort Act
acts were not official acts pursuant to his authority as President of the
Philippines. We rejected the contention that the Republic's RICO suit against 1. The Alien Tort Act, enacted as part of the First Judiciary Act of 1789,
Marcos involved a nonjusticiable political question: provides: The district courts shall have original jurisdiction of any civil
a. Although sometimes criticized as a ruler and at times invested with action by an alien for a tort only, committed in violation of the law of
extraordinary powers, Ferdinand Marcos does not appear to have nations or a treaty of the United States.
had the authority of an absolute autocrat. 2. In upholding the default judgment against Marcos-Manotoc, we held that a
b. He was not the state, but the head of the state, bound by the laws "suit as an alien for the tort of wrongful death, committed by military
that applied to him. Our courts have had no difficulty in intelligence officials through torture prohibited by the law of nations, is
distinguishing the legal acts of a deposed ruler from his acts for within the jurisdictional grant of Sec. 1350."
personal profit that lack a basis in law. 3. The Estate contends that there is no jurisdiction pursuant to the "Arising
c. As in the case of the deposed Venezuelan ruler, Marcos Perez Under" Clause of Art. III because Sec. 1350 is purely a jurisdictional statute.
Jimenez, the latter acts are as adjudicable and redressable as would 4. In Estate I, we agreed that a jurisdictional statute could "not alone confer
be a dictator's act of rape. jurisdiction on the federal courts, and that the rights of the parties must stand
 or fall on federal substantive law to pass constitutional muster." However, 13. The right to be free from official torture is fundamental and universal, a
we disagreed that there was no federal substantive law governing the right deserving of the highest stature under international law, a norm of
dispute. jus cogens. The crack of the whip, the clamp of the thumb screw, the crush
5. First, we concluded that even where FSIA was held inapplicable, there was of the iron maiden, and, in these more efficient modern times, the shock of
federal subject matter jurisdiction by virtue of the required analysis of the electric cattle prod are forms of torture that the international order will
whether immunity would be granted under FSIA. not tolerate.
6. This court stated: 14. To subject a person to such horrors is to commit one of the most egregious
a. We have concluded that Marcos-Manotoc's actions were not those violations of the personal security and dignity of a human being.
of the Republic of the Philippines for purposes of sovereign
immunity under Chuidian. Nevertheless, when questions of Fourth Issue: Preliminary Injunction from transferring estate pending suit proper
sovereign immunity under the FSIA are raised, as they have been
here, under Verlinden, subject-matter jurisdiction over this action 1. The grant of a preliminary injunction will be reversed only if the lower court
satisfies Article III. abused its discretion or based its decision on an erroneous legal standard or
7. We also rejected the Estate's argument that international law does not provide clearly erroneous findings of fact. The Estate argues that the district court
a basis for federal court jurisdiction under Sec. 1350: exceeded its authority in granting a preliminary injunction in a case seeking
a. The prohibition against official torture carries with it the force only money damages.
of a jus cogens norm, which enjoys the highest status within 2. It is unquestionable that it is within the district court's authority to issue a
international law. preliminary injunction where final equitable relief is sought. The injunction
b. We therefore conclude that the district court did not err in founding is authorized by the district court's inherent equitable power to issue
jurisdiction on a violation of the jus cogens norm prohibiting official provisional remedies ancillary to its authority to provide final equitable relief.
torture. 3. In fact, this court upheld the preliminary injunction entered in Republic of
8. The Estate also argues that the assertion of federal jurisdiction over an action the Philippines v. Marcos, to prevent Marcos (and subsequently, his Estate)
between aliens regarding injuries occurring in a foreign nation violates from transferring or dissipating assets, and which these plaintiffs seek to
Article III of the Constitution. continue. In that case, the Republic of the Philippines had brought a RICO
9. We held in Estate I that there is "ample indication" that the "Arising Under" suit against the Marcoses claiming that the Marcoses had converted public
Clause was meant to apply to "all cases involving foreigners." property to their own use, but also alleging a constructive trust. This court
10. The Estate's argument that section 9 requires one of the parties to be a citizen found that there was authority "to issue a preliminary injunction in order to
was explicitly rejected by the Supreme Court in Verlinden. The Supreme prevent a defendant from dissipating assets in order to preserve the possibility
Court held that "the 'Arising Under' Clause of Art. III provides an appropriate of equitable remedies."
basis for the statutory grant of subject-matter jurisdiction to actions by 4. Indeed, some of case law suggests that final equitable relief must be requested
foreign plaintiffs under the Act." The Court reviewed the "controlling to authorize preliminary injunctive relief. Because the authority to issue a
decision on the scope of Art. III 'arising under' jurisdiction” , and concluded preliminary injunction rests upon the authority to give final relief, the
that it reflected a broad conception of "arising under" jurisdiction, according authority to freeze assets by a preliminary injunction must rest upon the
to which Congress may confer on the federal courts jurisdiction over any case authority to give a form of final relief to which the asset freeze is an
or controversy that might call for the application of federal law. A suit against appropriate provisional remedy. However, to the extent that all of these cases
a foreign state under FSIA necessarily raises questions of substantive federal involved equitable relief, any language is dicta which addressed the court's
law at the very outset, and hence clearly "arises under" federal law, as that authority to issue a preliminary injunction where only money damages are
term is used in Art. III. sought.
11. In conclusion, this action brought for torts "committed by military 5. In fact, there is support in our case law for the opposite conclusion. In Flynt
intelligence officials through torture prohibited by the law of nations, is Distributing Co. v. Harvey, a preliminary injunction had been issued where
within the jurisdictional grant of Sec. 1350." This exercise of jurisdiction the plaintiff had alleged that the defendant was planning to dispose of its
does not violate Article III. business assets which would therefore be unavailable for levy of execution.
12. The allegations in this case satisfy the specific, universal and obligatory 6. We reversed the preliminary injunction, but not because only money damages
standard. "Under international law, official torture violates jus cogens." had been sought. We pointed to evidence presented to the district court that
 the company purchasing the assets had agreed to indemnify the defendant for
plaintiff's claim, and concluded "that the proposed sale to [the company]
would have provided adequate protection to Flynt for any money damages it
may obtain. The preliminary injunction was reversed because the district
court had not found that money damages would be an inadequate remedy.
Our decision thus implied that the traditional test for a preliminary
injunction is applied in a case seeking money damages, and that if the
plaintiff had demonstrated that the defendant's assets would be
dissipated and no relief would otherwise be available, the preliminary
injunction would have been appropriate.
7. The Supreme Court also has not directly decided this issue, although its
precedent suggests that a preliminary injunction should be available where a
remedy would be inadequate due to the dissipation of assets.
8. In its findings supporting the preliminary injunction, the district court found
a substantial likelihood that plaintiffs would succeed on the merits. In
fact, the plaintiffs have since prevailed at trial on liability and have been
awarded substantial exemplary damages. The court further found that
plaintiffs would be irreparably injured and that the remedies at law were
not adequate if the injunction were denied, concluding that there was
substantial danger that the defendants would transfer or conceal its funds,
resulting in denying recovery to the plaintiffs.
 004 TRAJANO vs. MARCOS (Esguerra) case, subject matter jurisdiction was properly acquired by the court
113 S. Ct. 2960; 978 F.2d 493 | 1993 | Tort and crimes under the ATS even if the parties are Filipino citizens and the tort
In re ESTATE OF FERDINAND E. MARCOS HUMAN RIGHTS LITIGATION. occurred outside the US as it is a jus cogens, a certain fundamental
Plaintiffs-Appellees: Agapita TRAJANO; Archimedes Trajano overriding principle of international law, from which no derogation is ever
Defendant: Ferdinand E. MARCOS
permitted. Trajano’s complaint alleges that she and her son were Filipino
Defendant-Appellant: Imee Marcos-Manotoc
citizens, and that her claim for relief arose from wrongful death statutes
SUMMARY: In 1977, Ferdinand Marcos was the President of the and international declarations of which the United States is a party
Philippines, Imee Marcos-Manotoc was the Chairman of the Kabataang
DOCTRINE: The FSIA grants immunity to a foreign official acting in an official
Baranggay and Fabian Ver was in charge of military intelligence. capacity, but that official is not entitled to immunity for acts which are not committed
Archimedes Trajano was a student at Mapua Institute of Technology. On in an official capacity, and for acts beyond the scope of her authority.
August 31, 1977, he asked a question in an open forum which Imee was
speaking. He asked about her appointment as a director of an The Alien Tort Statute provides that the district courts shall have original
organization. Afterwards, he was kidnapped, interrogated, and tortured jurisdiction of any civil action by an alien for a tort only, committed in violation of the
to death by military intelligence personnel who were acting under the law of nations or a treaty of the United States.
authority of Ver, Marcos, and Imee. In February 1986, Marcos, Imee, Ver FACTS:
and other Philippine public officials went to Hawaii to seek refuge. In 1. In August of 1977, Ferdinand Marcos was President of the Philippines, Imee
March of that year, Agapita Trajano, mother of Archimedes, filed a case Marcos-Manotoc was the National Chairman of the Kabataang Baranggay, and
Fabian Ver was in charge of military intelligence.
against Marcos and Imee for damages in the district court of Hawaii for 2. Archimedes Trajano was a student at the Mapua Institute of Technology. On the
false imprisonment, kidnapping, wrongful death, deprivation of rights of 31st of August, Trajano went to an open forum discussion at which Imee was
Archimedes and for emotional distress on her behalf. Imee was declared speaking. When Trajano asked a question about her appointment as director of an
in default. The court ruled that the death of Trajano was a tort in violation organization, he was kidnapped, interrogated, and tortured to death by military
of fundamental human rights, a jus cogens, a violation of the law of intelligence personnel who were acting under Ver's direction, pursuant to martial
nations under the Alien Tort Statute. The court awarded Trajano law declared by Marcos, and under the authority of Ver, Marcos, and Imee. He
damages in $4.16 M and attorney’s fees. was tortured and murdered for his political beliefs and activities. Imee controlled
the police and military intelligence personnel who tortured and murdered Trajano,
and knew they were taking him to be tortured, and caused Trajano's death.
Is Imee immune from suit under the Foreign Sovereign Immunities Act 3. In February of 1986, Marcos, Imee, General Ver and others left the Philippines
(FSIA)? (No) Does the District Court have jurisdiction under the Alien Tort and arrived at Hickam Air Force Base in Hawaii.
Statute (ATS)? (Yes) 4. On March 20, 1986, Agapita Trajano filed her complaint in the United States
District Court for the District of Hawaii. The complaint seeks damages on behalf
The FSIA covers immunity from suit of a foreign official acting in an of the estate of Archimedes Trajano for false imprisonment, kidnapping, wrongful
official capacity. Imee was not acting within any official mandate or any death, and a deprivation of rights, and on behalf of Trajano's mother for emotional
distress.
official act when the tort occurred. The immunity under FSIA does not 5. For her failure to answer, default was entered against Imee.
apply.
The torture of Trajano was a clear violation of law of nations and the IMEE’s ARGUMENTs:
suit falls within the causes of action under the ATS. The ATS confers 1. The district court lacked subject-matter jurisdiction under the Alien Tort Statute
district courts with subject matter jurisdiction over alien plaintiffs' civil (ATS, 28 U.S.C. § 1350) and that the Foreign Sovereign Immunities Act (FSIA,
actions for torts committed in violation of the law of nations. Jurisdiction 28 U.S.C. §§ 1330) does not authorize a federal court to assert jurisdiction over
under the ATS encompasses extraterritorial causes of action. In this actions taken by a foreign government against its own citizens.
2. The Philippine Military Intelligence is an "instrumentality" of the Philippines, and not acting within any official mandate or any official act when the tort occurred.
that the tortious acts were brought about by persons acting pursuant to the 2. Whether the district court had subject matter jurisdiction over the suit under
authority of Marcos, Imee, and Ver such that the liability of Imee is expressly the Alien Tort Statute. Yes Trajano's suit as an alien for the tort of wrongful
premised on her authority as a government agent. death through torture, prohibited by the law of nations, is within the jurisdictional
3. She further contends that, regardless of whether she acted within the scope of her grant of the Alien Tort Statute.
employment, she is entitled to absolute immunity under the FSIA because a
foreign state and its agents lose sovereign immunity only for tortious acts RULING: District Court ruling AFFIRMED
occurring in the United States.
4. The district court erred in assuming jurisdiction of a tort committed by a foreign RATIO: On immunity
state's agents against its nationals outside of the United States, and having no 1. The FSIA must be applied by the courts in every action against a foreign
nexus to the US. If ATS were construed to confer jurisdiction under these sovereign, since subject-matter jurisdiction in any such action depends on the
circumstances, it would exceed the constitutional limits on federal court existence of one of the specified exceptions to foreign sovereign immunity.
jurisdiction under the Constitution. 2. A "foreign state" under the Act includes an agency or instrumentality of a foreign
5. There is no extraterritorial jurisdiction over civil actions based on torture. She state.
urges that the United States is not obliged to open its courts for the redress of 3. An "agency or instrumentality of a foreign state" for purposes of the FSIA
torture occurring in another country. First, she points to the fact that when the includes individuals acting in their official capacity.
Senate ratified the United Nations Convention against Torture and Other Cruel, 4. In Chuidian, the Court held that the FSIA covers a foreign official acting in an
Inhuman or Degrading Treatment or Punishment, it attached an understanding that official capacity, but that an official is not entitled to immunity for acts which
a state is required to provide a private right of action only for torture committed are not committed in an official capacity (such as selling personal property),
in territory under its jurisdiction. From this she infers that it is inappropriate to and for acts beyond the scope of her authority (for example, doing something
rely on principles of international law to give victims of torture enforcement rights the sovereign has not empowered the official to do).
outside their own country. 5. By Imee’s default, she has admitted acting on her own authority, not on the
6. The district court's interpretation of ATS would open the floodgates to "foreign" authority of the Republic of the Philippines. Under these circumstances, her acts
cases in the federal courts. She also suggests that to permit cases of this sort would cannot have been taken within any official mandate and therefore cannot have
invite, rather than avoid, controversy with foreign nations been acts of an agent or instrumentality of a foreign state within the meaning of
7. The United States Constitution does not support jurisdiction over purely foreign the FSIA. Therefore, the district court did not err in failing to dismiss Imee in her
disputes such as Trajano's claim against her. individual capacity.

TRAJANO’s ARGUMENT: On Jurisdiction under the Alien Tort Statute

1. In Chuidian v. Philippine Nat'l Bank (1990), the FSIA does not immunize acts of 1. Absent jurisdiction under the FSIA, there is no dispute that the only possible
individuals which are outside the scope of their official duties, and that the acts of jurisdictional basis for Trajano's action is the ATS, which provides: “The district
torture and arbitrary killing (which the complaint avers occurred under Imee’s courts shall have original jurisdiction of any civil action by an alien for a tort
own authority) cannot be "official acts" within whatever authority Imee was given only, committed in violation of the law of nations or a treaty of the United
by the Republic of the Philippines. States”.
2. The statute requires (1) a claim by an alien, (2) a tort, and (3) a violation of
District Court of Hawaii’s RULING: international law. Trajano's complaint alleges that she and her son were citizens
• After a damages hearing, judgment was entered based on the court's findings that of the Philippines, and that her claims for relief arise under wrongful death statutes
Trajano was tortured and his death was caused by Imee. The court concluded that and various international declarations.
this violation of fundamental human rights constitutes a tort in violation of the 3. There is no doubt that causing Trajano's death was wrongful, and is a tort. Nor, in
law of nations under the ATS, and awarded damages of $4.16 million and view of Imee’s default, is there any dispute that Trajano's death was caused by
attorneys' fees pursuant to Philippine law torture. And it would be unthinkable to conclude other than that acts of official
torture violate customary international law. The prohibition against official torture
ISSUES: occupies a uniquely high status among norms of international law. It carries with
1. Whether Imee can claim immunity from the suit under the FSIA. No. she was it the force of a jus cogens norm, which enjoys the highest status within
 international law. Under international law, any state that engages in official torture
violates jus cogens.
4. On its face, the ATS shows no limitation as to the locus of the injury.
5. The Philippine government has no objection to the United States District Court's
entertaining Trajano's claim, so there can be no unwarranted interference with its
domestic affairs. And, because of Imee’s default, traditional brakes on access to
the federal courts by those having insufficient nexus to the United States were not
considered (e.g. forum non conveniens). – not really related to jurisdictional
issue
6. The district court's approach comports with the view that the First Congress
enacted the predecessor to the ATS to provide a federal forum for transitory torts
(a tort action which follows the tortfeasor wherever he goes). The approach also
allows the "law of nations" and "treaty" prongs of the ATS to be treated
consistently, in that the cause of action comes from municipal tort law and not
from the law of nations or treaties of the United States. – also not really related
to jurisdiction
7. For these reasons we affirm the judgment in Trajano's favor. Her suit as an alien
against Imee for having caused the wrongful death of her son, by official torture
in violation of a jus cogens norm of international law, properly invokes the
subject-matter jurisdiction of the federal courts under the ATS.
005 SAUDI ARABIAN AIRLINES V. CA (Buenaventura edited by Fordan) through her act of filing, and SAUDIA by praying for the dismissal of the
Oct. 8, 1998 | Quisumbing, J. | Torts amended complaint on grounds other than lack of jurisdiction.
(2) Whether or not the Philippine law should govern. Philippine law governs.
PETITIONER: Saudi Arabian Airlines SC held that considering that the complaint in the court a quo is one involving
RESPONDENTS: CA, Milagros P. Morada, and Hon. Rodolfo A. Ortiz, in his torts, the “connecting factor” or “point of contact” could be the place or places
capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon City where the tortious conduct or lex loci actus occurred. And applying the torts
principle in a conflicts case, we find that the Philippines could be said as a situs
SUMMARY: SAUDIA hired MORADA as a flight attendant in 1988, based in of the tort (the place where the alleged tortious conduct took place). This is
Jeddah. On 1990, while on a lay-over in Jakarta, Indonesia, she went to party with because it is in the Philippines where SAUDIA allegedly deceived Morada, a
2 male crew members and on the following morning in their hotel, one of the Filipina residing and working here. 24. According to Morada, she had
male attendants attempted to rape her. She was rescued by hotel attendants who honestly believed that SAUDIA would, in the exercise of its rights and in the
heard her cry for help. The Indonesian police arrested the 2 crew members. performance of its duties, act with justice, give her due and observe honesty and
MORADA returned to Jeddah, but was asked by SAUDIA to go back to Jakarta good faith. Instead, SAUDIA failed to protect her. Furthermore, the SC held
and help arrange the release of the 2 male crew members. MORADA did not that given the factual context of the case, the state of the most significant
cooperate when she got to Jakarta. What followed was a series of interrogations relationship rule should be applied. *doctrine* From the record, the claim that
from the Saudi Courts which she did not understand as this was in their language, the Philippines has the most significant contact with the matter in this dispute,
Arabic. In 1993, she was surprised, upon being ordered by SAUDIA to go to the raised by Morada against SAUDIA, in our view, has been properly established.
Saudi court, that she was being convicted of (1) adultery; (2) going to a disco, Prescinding from this premise that the Philippines is the situs of the tort
dancing and listening to the music in violation of Islamic laws; and (3) socializing complained of and the place “having the most interest in the problem,” we find,
with the male crew, in contravention of Islamic tradition, sentencing her to five by way of recapitulation, that the Philippine law on tort liability should have
months imprisonment and to 286 lashes. SAUDIA denied her the assistance she paramount application to and control in the resolution of the legal issues arising
requested, But because she was wrongfully convicted, Prince of Makkah out of this case.
dismissed the case against her and allowed her to leave Saudi Arabia. Shortly
before her return to Manila, she was terminated from the service by SAUDIA, DOCTRINE: In applying “State of the most significant relationship” rule, to
without her being informed of the cause. Morada filed a complaint for damages determine the State which has the most significant relationship, the following
against SAUDIA, and Khaled Al-Balawi its country manager. SAUDIA alles that contacts are to be taken into account and evaluated according to their relative
Morada’s claim for alleged abuse of rights occurred in the Kingdom of Saudi importance with respect to the particular issue: (a) the place where the injury
Arabia. It alleges that the existence of a foreign element qualifies the instant case occurred; (b) the place where the conduct causing the injury occurred; (c) the
for the application of the law of the Kingdom of Saudi Arabia, by virtue of the domicile, residence, nationality, place of incorporation and place of business of
lex loci delicti commissi rule. MORADA alleges that since her amended the parties, and (d) the place where the relationship, if any, between the parties
complaint is based on Arts. 19 and 21 of the Civil Code, then the instant case is is centered.
properly a matter of domestic law.
FACTS:
The following are the issues and corresponding ratio: 19. On Jan. 21, 1988, Saudi Arabian Airlines (SAUDIA) hired Milagros P.
(1) whether or not the RTC of QC has jurisdiction to hear and try civil case. Morada (Morada) as a flight attendant for its airlines based in Jeddah, Saudi
YES. SC finds that the RTC of Quezon City possesses jurisdiction over the Arabia.
subject matter of the suit. Its authority to try and hear the case is provided for 20. On Apr. 27, 1990, while on a lay-over in Jakarta, Indonesia, Morada went
under Sec. 1 of Republic Act No. 7691 and Sec. 2(b), Rule 4 of the Revised to a disco dance with fellow crew members Thamer Al-Gazzawi (Thamer)
Rules of Court. Weighing the relative claims of the parties, the court a quo and Allah Al-Gazzawi (Allah), both Saudi nationals.
found it best to hear the case in the Philippines. Had it refused to take 21. When they returned to their hotel, they agreed to have breakfast together at
cognizance of the case, it would be forcing Morada to seek remedial action the room of Thamer. When they were in the room, Allah left and Thamer
elsewhere, i.e. in the Kingdom of Saudi Arabia where she no longer maintains attempted to rape Morada. Fortunately, a roomboy and several security
substantial connections. That would have caused a fundamental unfairness to personnel heard her cries for help and rescued her. Later, the Indonesian
her. The trial court also acquired jurisdiction over the parties. MORADA police came and arrested Thamer and Allah, as an accomplice.
22. When Morada returned to Jeddah a few days later, several SAUDIA officials a. that the Complaint states no cause of action against Saudia;
interrogated her about the Jakarta incident. They then requested her to go b. that defendant Al-Balawi is not a real party in interest;
back to Jakarta to help arrange the release of Thamer and Allah. c. that the claim or demand set forth in the Complaint has been waived,
23. She learned that the Indonesian authorities agreed with Saudi Arabia abandoned or otherwise extinguished; and
government to deport Thamer and Allah after 2 weeks of detention. d. that the trial court has no jurisdiction to try the case.
Eventually, they were again put in service by SAUDIA. Morada was then 32. Morada filed an amended complaint wherein Al-Balawi was dropped as party
transferred to Manila. defendant. Thereafter, SAUDIA filed its manifestation and motion to dismiss
24. On Jan. 24, 1992, Morada was requested by her superiors to see Mr. Ali amended complaint
Miniewy (Miniewy), Chief Legal Officer of SAUDIA, in Jeddah, Saudi 33. The trial court issued an order denying the motion to dismiss amended Complaint
Arabia. When she saw him, he brought her to the police station where the filed by SAUDIA. From the said order, SAUDIA filed an MR alleging that the
police took her passport and questioned her about the Jakarta incident. trial court has no jurisdiction to hear and try the case on the basis of Art. 21 of
Miniewy simply stood by as the police put pressure on her to make a the Civil Code since the proper law applicable is the law of the Kingdom of Saudi
statement dropping the case against Thamer and Allah. Not until she agreed Arabia.
to do so did the police return her passport and allowed her to catch the 34. RTC Judge subsequently issued another order denying SAUDIA’s MR.
afternoon flight out of Jeddah. 35. SAUDIA then filed its Petition for Certiorari and Prohibition with Prayer for
25. On June 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order
departure of her flight to Manila, Morada was not allowed to board the plane with the CA.
and instead ordered to take a later flight to Jeddah to see Miniewy. When 36. The CA rendered the Decision now also being assailed. It ruled that the
she did, a certain Khalid of the SAUDIA office brought her to a Saudi court Philippines is an appropriate forum considering that the amended complaints
where she was asked to sign a document written in Arabic which was basis for recovery of damages is Art. 21 of the Civil Code, and thus, clearly
necessary to close the case against Thamer and Allah. within the jurisdiction of trial court. It further held that certiorari is not the
26. Shortly afterwards, SAUDIA summoned Morada to report to Jeddah once proper remedy in a denial of a motion to dismiss, inasmuch as SAUDIA should
again and see Miniewy for further investigation. Morada did so after have proceeded to trial, and in case of an adverse ruling, find recourse in an
receiving assurance from SAUDIA’s Manila manager, Aslam Saleemi, that appeal.
the investigation was routinary and that it posed no danger to her. 37. Hence, the current petition.
27. On July 3, 1993 a SAUDIA legal officer again escorted Morada to the same
court where the judge, to her astonishment and shock, rendered a decision, ISSUES:
translated to her in English, sentencing her to 5 months imprisonment and 5. Whether or not the RTC of QC has jurisdiction to hear and try civil case. – YES,
to 286 lashes. Only then did she realize that the Saudi court had tried her, rules of court provides plaintiff can elect the venue, also SAUDIA voluntarily
together with Thamer and Allah, for what happened in Jakarta. The court submitted to the jurisdiction of the RTC because of filing motions to dismiss
found Morada guilty of (1) adultery; (2) going to a disco, dancing and other than lack of jurisdiction.
listening to the music in violation of Islamic laws; and (3) socializing with 6. Whether or not the Philippine law should govern. – YES, the basis of the damages
the male crew, in contravention of Islamic tradition. suit was Arts.19 and 21 of the Civil Code.
28. Facing conviction, Morada sought the help of SAUDIA. Unfortunately, she was
denied any assistance. She then asked the Philippine Embassy in Jeddah to help RULING: The instant petition for certiorari is hereby dismissed. Civil Case entitled
her while her case is on appeal. Milagros P. Morada vs. Saudi Arabia Airlines is hereby remanded to RTC of QC,
29. Because she was wrongfully convicted, the Prince of Makkah dismissed the case Branch 89 for further proceedings. So ordered.
against her and allowed her to leave Saudi Arabia. Shortly before her return to
Manila, she was terminated from the service by SAUDIA, without her being RATIO:
informed of the cause. 28. SAUDIA claims that before us is a conflict of laws that must be settled at the
30. On Nov. 23, 1993, Morada filed a complaint for damages against SAUDIA, and outset. It maintains that Morada’s claim for alleged abuse of rights occurred in
Khaled Al-Balawi (Al- Balawi), its country manager, in the RTC of QC. the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element
31. SAUDIA filed an omnibus motion to dismiss which raised the following qualifies the instant case for the application of the law of the Kingdom of Saudi
grounds, to wit: Arabia, by virtue of the lex loci delicti commissi rule.
 29. On the other hand, Morada contends that since her amended complaint is based SEC. 19. Jurisdiction in Civil Cases. Regional Trial Courts shall
on Arts. 19 and 21 of the Civil Code, then the instant case is properly a matter of exercise exclusive jurisdiction:
domestic law. xxx
30. Under the factual antecedents obtaining in this case, there is no dispute that the (8) In all other cases in which demand, exclusive of interest,
interplay of events occurred in two states, the Philippines and Saudi Arabia. damages of whatever kind, attorneys fees, litigation expenses, and
31. Where the factual antecedents satisfactorily establish the existence of a foreign costs or the value of the property in controversy exceeds One
element, we agree with SAUDIA that the problem herein could present a hundred thousand pesos (P100,000.00) or, in such other cases in
conflicts case. Metro Manila, where the demand, exclusive of the above-mentioned
items exceeds Two hundred Thousand pesos (P200,000.00).
Discussion on the existence of foreign element 38. And following Sec. 2(b), Rule 4 of the Revised Rules of Court the venue, Quezon
32. A factual situation that cuts across territorial lines and is affected by the diverse City, is appropriate:
laws of two or more states is said to contain a foreign element. The presence of SEC. 2 Venue in Courts of First Instance. [Now Regional Trial Court]
a foreign element is inevitable since social and economic affairs of individuals xxx
and associations are rarely confined to the geographic limits of their birth or (b) Personal actions. All other actions may be commenced and tried
conception. where the defendant or any of the defendants resides or may be found,
33. In this case, the foreign element consisted in the fact that Morada is a resident or where the plaintiff or any of the plaintiff resides, at the election of the
Philippine national, and that SAUDIA is a resident foreign corporation. Also, by plaintiff.
virtue of the employment of Morada with SAUDIA as a flight stewardess, events 39. Weighing the relative claims of the parties, the court a quo found it best to hear
did transpire during her many occasions of travel across national borders, the case in the Philippines. Had it refused to take cognizance of the case, it would
particularly from Manila, Philippines to Jeddah, Saudi Arabia, and vice versa, be forcing Morada to seek remedial action elsewhere, i.e. in the Kingdom of
that caused a conflicts situation to arise. Saudi Arabia where she no longer maintains substantial connections. That would
34. We thus find Morada’s assertion that the case is purely domestic, have caused a fundamental unfairness to her.
imprecise. A conflicts problem presents itself here, and the question of 40. Similarly, the trial court also possesses jurisdiction over the persons of the parties
jurisdiction confronts the court a quo. herein.
Ø By filing her complaint and amended complaint with the trial court, Morada
Discussion on the jurisdiction of RTC has voluntary submitted herself to the jurisdiction of the court.
35. After a careful study of Morada’s amended complaint, and the comment thereon, Ø The records show that SAUDIA has filed several motions praying for the
we note that she aptly predicated her cause of action on Arts. 1991 and 2192 of the dismissal of Morada’s amended complaint and it also filed an Answer In Ex
New Civil Code. Abundante Cautelam.
36. Thus, in Philippine National Bank (PNB) vs. Court of Appeals, this Court held Ø Undeniably, SAUDIA has effectively submitted to the trial court’s
that: the provisions on human relations were intended to expand the concept of jurisdiction by praying for the dismissal of the amended complaint on
torts in this jurisdiction by granting adequate legal remedy for the untold number grounds other than lack of jurisdiction.
of moral wrongs which is impossible for human foresight to specifically provide 41. Clearly, SAUDIA had submitted to the jurisdiction of the RTC of Quezon
in the statutes. City. Thus, we find that the trial court has jurisdiction over the case and that its
37. We find that the RTC of Quezon City possesses jurisdiction over the subject exercise thereof, justified.
matter of the suit. Its authority to try and hear the case is provided for under Sec.
1 of Republic Act No. 7691, to wit: Discussion on choice of law
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known 42. As to the choice of applicable law, we note that choice-of-law problems seek to
as the Judiciary Reorganization Act of 1980, is hereby amended to answer 2 important questions: (1) What legal system should control a given
read as follows: situation where some of the significant facts occurred in two or more states; and
(2) to what extent should the chosen legal system regulate the situation.

91 92
Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, Art. 21. Any person who willfully causes loss or injury to another in a manner that is contrary
act with justice give everyone his due and observe honesty and good faith. to morals, good customs or public policy shall compensate the latter for damages.
43. Several theories have been propounded in order to identify the legal system that 47. After careful study of the pleadings on record, we are convinced that there is
should ultimately control. Although ideally, all choice-of-law theories should reasonable basis for Morada’s assertion that although she was already working
intrinsically advance both notions of justice and predictability, they do not in Manila, SAUDIA brought her to Jeddah on the pretense that she would merely
always do so. The forum is then faced with the problem of deciding which of testify in an investigation of the charges she made against the 2 SAUDIA crew
these 2 important values should be stressed. members for the attack on her person while they were in Jakarta. As it turned out,
44. Before a choice can be made, it is necessary for us to determine under what she was the one made to face trial for very serious charges, including adultery
category a certain set of facts or rules fall. This process is known as and violation of Islamic laws and tradition.
“characterization” or the “doctrine of qualification”. It is the process of deciding 48. There is likewise logical basis on record for the claim that the “handing over” or
whether or not the facts relate to the kind of question specified in a conflicts rule. “turning over” of the person of Morada to Jeddah officials, SAUDIA may have
The purpose of characterization is to enable the forum to select the proper law. acted beyond its duties as employer. SAUDIA’s purported act contributed to and
45. Our starting point of analysis here is not a legal relation, but a factual situation, amplified or even proximately caused additional humiliation, misery and
event, or operative fact. An essential element of conflict rules is the indication of suffering of Morada.
a test or connecting factor or point of contact. Choice-of-law rules invariably 49. SAUDIA thereby allegedly facilitated the arrest, detention and prosecution of
consist of a factual relationship (such as property right, contract claim) and a Morada under the guise of SAUDIA’s authority as employer, taking advantage
connecting factor or point of contact, such as the situs of the res, the place of of the trust, confidence and faith she reposed upon it. As purportedly found by
celebration, the place of performance, or the place of wrongdoing. the Prince of Makkah, the alleged conviction and imprisonment of Morada was
46. Note that one or more circumstances may be present to serve as the possible test wrongful. But these capped the injury or harm allegedly inflicted upon her person
for the determination of the applicable law. These test factors or points of contact and reputation, for which SAUDIA could be liable as claimed, to provide
or connecting factors could be any of the following: compensation or redress for the wrongs done, once duly proven.
(1) The nationality of a person, his domicile, his residence, his place of
sojourn, or his origin; Discussion of conflict of laws on Torts (IMPORTANT)
(2) the seat of a legal or juridical person, such as a corporation; 50. Considering that the complaint in the court a quo is one involving torts, the
(3) the situs of a thing, that is, the place where a thing is, or is deemed to connecting factor or point of contact could be the place or places where the
be situated. In particular, the lex situs is decisive when real rights are tortious conduct or lex loci actus occurred. And applying the torts principle
involved; in a conflicts case, we find that the Philippines could be said as a situs of the
(4) the place where an act has been done, the locus actus, such as the place tort (the place where the alleged tortious conduct took place). This is because
where a contract has been made, a marriage celebrated, a will signed or it is in the Philippines where SAUDIA allegedly deceived Morada, a Filipina
a tort committed. The lex loci actus is particularly important in residing and working here.
contracts and torts; 51. According to Morada, she had honestly believed that SAUDIA would, in the
(5) the place where an act is intended to come into effect, e.g., the place of exercise of its rights and in the performance of its duties, act with justice, give
performance of contractual duties, or the place where a power of her due and observe honesty and good faith. Instead, SAUDIA failed to protect
attorney is to be exercised; her.
(6) the intention of the contracting parties as to the law that should govern 52. Moreover, with the widespread criticism of the traditional rule of lex loci delicti
their agreement, the lex loci intentionis; commissi, modern theories and rules on tort liability have been advanced to offer
(7) the place where judicial or administrative proceedings are instituted or fresh judicial approaches to arrive at just results. In keeping abreast with
done. The lex forithe law of the forumis particularly important because, the modern theories on tort liability, we find here an occasion to apply the State
as we have seen earlier, matters of procedure not going to the substance of the most significant relationship rule, which in our view should be
of the claim involved are governed by it; and because the lex appropriate to apply now, given the factual context of this case.
fori applies whenever the content of the otherwise applicable foreign 53. In applying “State of the most significant relationship” to determine the State
law is excluded from application in a given case for the reason that it which has the most significant relationship, the following contacts are to be
falls under one of the exceptions to the applications of foreign law; and taken into account and evaluated according to their relative importance
(8) the flag of a ship, which in many cases is decisive of practically all legal with respect to the particular issue:
relationships of the ship and of its master or owner as such. It also a. the place where the injury occurred;
covers contractual relationships particularly contracts of affreightment. b. the place where the conduct causing the injury occurred;
 c. the domicile, residence, nationality, place of incorporation and place of
business of the parties, and
d. the place where the relationship, if any, between the parties is centered.
54. As already discussed, there is basis for the claim that overall injury occurred and
lodged in the Philippines. There is likewise no question that Morada is a resident
Filipina national, working with SAUDIA, a resident foreign corporation engaged
here in the business of international air carriage. Thus, the relationship between
the parties was centered here, although it should be stressed that this suit is not
based on mere labor law violations.
55. From the record, the claim that the Philippines has the most significant contact
with the matter in this dispute, raised by Morada against SAUDIA, in our view,
has been properly established.
56. Prescinding from this premise that the Philippines is the situs of the tort
complained of and the place “having the most interest in the problem,” we
find, by way of recapitulation, that the Philippine law on tort liability should
have paramount application to and control in the resolution of the legal
issues arising out of this case.
57. Further, we hold that the RTC has jurisdiction over the parties and the subject
matter of the complaint; the appropriate venue is in Quezon City, which could
properly apply Philippine law.
58. Moreover, we find untenable SAUDIA’s insistence that “since Morada instituted
this suit, she has the burden of pleading and proving the applicable Saudi law on
the matter.” As aptly said by Morada, she has no obligation to plead and prove
the law of the Kingdom of Saudi Arabia since her cause of action is based on
Arts. 19 and 21 of the Civil Code of the Philippines. In her amended complaint
and subsequent pleadings, she never alleged that Saudi law should govern this
case. And as correctly held by the CA, “considering that it was the SAUDIA who
was invoking the applicability of the law of Saudi Arabia, then the burden was
on it to plead and to establish what the law of Saudi Arabia is.”
59. The Philippines is the state intimately concerned with the ultimate outcome of
the case below, not just for the benefit of all the litigants, but also for the
vindication of the country’s system of law and justice in a transnational setting.
With these guidelines in mind, the trial court must proceed to try and adjudge the
case in the light of relevant Philippine law, with due consideration of the foreign
element or elements involved. Nothing said herein, of course, should be
construed as prejudging the results of the case in any manner whatsoever.
 006 NATIONAL UNION v. STOLT-NIELSEN (GALINDEZ) a. United Coconut Chemicals Inc. – SHIPPER
April 26, 1990 | Melencio-Herrera, J. | Arbitration b. Stolt-Nielsen PH Inc. – CARRIER
c. Nieuewe Matex – CONSIGNEE
d. National Union - INSURER
PETITIONER: National Union Fire Insurance Company of Pittsburg,
2. On January 1985, United Coconut Chemicals Inc (SHIPPER) shipped 404
PA/American International Underwriter (Phil.) Inc.,
metric tons of fatty acid on board MT “Stolt Sceptre”, owned by respondent
RESPONDENTS: Stolt-Nielsen PH, Inc. and CA
Stolt-Nielsen PH Inc. (CARRIER) from Bauan, Batangas consigned to
Nieuewe Matex (CONSIGNEE) at Rotterdam, Netherlands covered by
SUMMARY: PLEASE SEE PARTIES IN FACT #1.
Tanker Bill of Lading.
3. The shipment was insured under a marine cargo policy with petitioner
United shipped metric tons of fatty acid on MT Stolt Sceptre, owned by
National Union (INSURER).
respondent Stolt consigned to Nieuewe in Netherlands covered by a Bill of
4. It appears that the BL issued by Stolt contained a general statement of
Lading. The shipment was insured with National Union. When the goods arrived
incorporation of the terms of a Charter Party between United-Shipper and
in Netherlands, it was found to be contaminated and discolored. United filed a
Parcel Tankers entered into in Greenwich, Connecticut, USA.
claim against the carrier, Stolt but to no avail. Hence it filed a claim with National
5. Upon receipt of Nieuewe of the cargo in Netherlands, it was found to be
Union and was paid.
discolored and totally contaminated. United filed a claim with Stolt which
was denied by the latter. Hence, National Union indemnified United pursuant
National Union as subrogee sued Stolt in the RTC. Stoled filed a motion to
to the marine cargo policy.
dismiss/suspend, because of a stipulation in the Charter Party which was
6. As subrogee of United, National Union filed suit against Stolt before the RTC
incorporated in the Bill of Lading that the matter should first be referred to
of Makati for recovery of P1.6M representing the amount National Union
arbitration (see Facts 1&2). The RTC deferred resolution on the Motion to
paid United.
Dismiss/Suspend Proceedings until trial on the merits "since the ground
7. Stolt moved to dismiss/suspend the proceedings on the ground that the RTC
alleged in said motion does not appear to be indubitable."
had no jurisdiction as such was arbitrable; as subrogee of United, National
Union is subject to the provisions of the Bill of Lading which includes a
This prompted Stolt to file a petition for certiorari and prohibition with the
provision that the shipment is carried under and pursuant to the terms of
CA which it granted. The CA reversed the RTC’s decision and ordered
the Charter Party between United and Parcel Tankers, providing for
National Union to refer its claim to arbitration. The SC affirmed the CA’s
arbitration.
decision. It ruled that clearly, the Bill of Lading incorporates by reference the
8. National Union opposed on the ground that it was not legally bound to submit
terms of the Charter Party. (SEE DOCTRINE).
the claim for arbitration as the arbitration clause provided in the Charter Party
was not incorporated into the Bill of Lading and that the arbitration clause
The entire contract must be read together and its clauses interpreted in relation to
is void for being unreasonable and unjust.
one another and not by parts. Moreover, in cases where a Bill of Lading has been
9. On July 1987, the RTC denied the Motion but subsequently reconsidered and
issued by a carrier covering goods shipped aboard a vessel under a charter party,
deferred resolution on the Motion to Dismiss/Suspend Proceedings until trial
and the charterer is also the holder of the bill of lading, "the bill of lading operates
on the merits "since the ground alleged in said motion does not appear to be
as the receipt for the goods, and as document of title passing the property of the
indubitable."
goods, but not as varying the contract between the charterer and the shipowner".
10. Stolt then resorted to a Petition for Certiorari and Prohibition w/ prayer for
Preliminary Injunction and/or TRO before the CA seeking annulment of
DOCTRINE: It is settled law that the charter may be made part of the contract
RTC’s Order.
under which the goods are carried by an appropriate reference in the Bill of
11. CA ruled to set aside the RTC’s Order (Fact 9), and ordered National Union
Lading. This should include the provision on arbitration even without a specific
to refer its claims for arbitration.
stipulation to that effect.
ISSUE/s:
FACTS: 1. WoN the Petition for Certiorari was proper – YES, as an exception to the
1. PARTIES: rule. While a Court Order deferring action on a motion to dismiss until the
 trial is interlocutory and cannot be challenged until final judgment, still, 6. As the CA found, National Union "cannot feign ignorance of the arbitration
where it clearly appears that the trial Judge or Court is proceeding in excess clause since it was already charged with notice of the existence of the charter
or outside of its jurisdiction, the remedy of prohibition would lie since it party due to an appropriate reference thereof in the bill of lading and, by the
would be useless and a waste of time to go ahead with the proceedings. exercise of ordinary diligence, it could have easily obtained a copy thereof
2. (IMPORTANT) WoN the arbitration clause is binding on National Union – either from the shipper or the charterer.”
YES. As the subrogee of United, National Union is bound by the Charter 7. National Union cannot avoid the binding effect of the arbitration clause. By
Party and the Bill of Lading. subrogation, it became privy to the Charter Party as fully as United before the
latter was indemnified, because as subrogee it stepped into the shoes of the
RULING: WHEREFORE, finding no reversible error in respondent Appellate Court's United and is subrogated merely to the latter's rights.
12 April 1989 Decision, the instant Petition for Review on certiorari is DENIED and 8. Since the right of action of United is governed by the provisions of the Bill
the said judgment is hereby AFFIRMED. Costs against petitioners. of Lading, which includes by reference the terms of the Charter Party,
necessarily, a suit by National Union is subject to the same agreements.
RATIO: 9. As the subrogee of United, National Union is contractually bound by the
1. The pertinent portion of the Bill of Lading provides in part: terms of the Charter party. Any claim of inconvenience or additional expense
a. This shipment is carried under and pursuant to the terms of the Charter dated on its part should not render the arbitration clause unenforceable.
December 21st 1984 at Greenwich, Connecticut, U.S.A. between Parcel Tankers. Inc. 10. Arbitration, as an alternative mode of settling disputes, has long been
and United Coconut Chemicals, Ind. as Charterer and all the terms whatsoever of the recognized and accepted in our jurisdiction. RA 876 (The Arbitration Law)
said Charter except the rate and payment of freight specified therein apply to and
govern the rights of the parties concerned in this shipment. Copy of the Charter may
also expressly authorizes arbitration of domestic disputes.
be obtained from the Shipper or Charterer. 11. Foreign arbitration as a system of settling commercial disputes of an
2. The provision on arbitration in the Charter Party reads: international character was likewise recognized when the Philippines adhered
a. Arbitration. Any dispute arising from the making, performance or termination of this to the United Nations "Convention on the Recognition and the Enforcement
Charter Party shall be settled in New York, Owner and Charterer each appointing an of Foreign Arbitral Awards of 1958," under the 10 May 1965 Resolution No.
arbitrator, who shall be a merchant, broker or individual experienced in the shipping
business; the two thus chosen, if they cannot agree, shall nominate a third arbitrator
71 of the Philippine Senate, giving reciprocal recognition and allowing
who shall be an admiralty lawyer. Such arbitration shall be conducted in conformity enforcement of international arbitration agreements between parties of
with the provisions and procedure of the United States arbitration act, and a judgment different nationalities within a contracting state.
of the court shall be entered upon any award made by said arbitrator. Nothing in this a. Each Contracting State shall recognize an agreement in writing under which the
clause shall be deemed to waive Owner's right to lien on the cargo for freight, deed parties undertake to submit to arbitration all or any differences which have arisen or
of freight, or demurrage. which may arise between them in respect of a defined legal relationship, whether
3. Clearly, the Bill of Lading incorporates by reference the terms of the contractual or not, concerning a subject matter capable of settlement by arbitration.
Charter Party. It is settled law that the charter may be made part of the b. The term "agreement in writing" shall include an arbitral clause in a contract or an
arbitration agreement, signed by the parties or contained in an exchange of letters or
contract under which the goods are carried by an appropriate reference in the telegrams.
Bill of Lading. c. The court of a Contracting State, when seized of an action in a matter in respect of
4. This should include the provision on arbitration even without a specific which the parties have made an agreement within the meaning of this article, shall,
stipulation to that effect. The entire contract must be read together and its at the request of one of the parties, refer the parties to arbitration, unless it finds that
the said agreement is null and void, inoperative or incapable of being performed.
clauses interpreted in relation to one another and not by parts. Moreover, in
12. It has not been shown that the arbitral clause in question is null and void,
cases where a Bill of Lading has been issued by a carrier covering goods
inoperative, or incapable of being performed. Nor has any conflict been
shipped aboard a vessel under a charter party, and the charterer is also the
pointed out between the Charter Party and the Bill of Lading.
holder of the bill of lading, "the bill of lading operates as the receipt for the
13. In fine, referral to arbitration in New York pursuant to the arbitration clause,
goods, and as document of title passing the property of the goods, but not as
and suspension of the proceedings in Civil Case No. 13498 below, pending
varying the contract between the charterer and the shipowner".
the return of the arbitral award, is, indeed called for.
5. The Bill of Lading becomes, therefore, only a receipt and not the contract of
carriage in a charter of the entire vessel, for the contract is the Charter Party
and is the law between the parties who are bound by its terms and condition
provided that these are not contrary to law, morals, good customs, public
order and public policy.
 007 QUERUBIN v. QUERUBIN (Gonzales) c. "(3) Each party shall have the right to take said child from said
July 29, 1950 | Pablo, J. | Recognition and Enforcement of Foreign Judgment neutral home but Margaret is restrained from taking said child to her
place of residence;
PETITIONER: Margaret Querubin d. "(4) Each party is restrained from molesting the other, or in any way
RESPONDENT: Silvestre Querubin interfering with the other's right of reasonable visitation of said
child;
SUMMARY: Silvestre and Margaret got married and they had a child named e. "(5) Each party is restrained from removing the child from the State
Querubina. However their relationship turned sour, with Margaret having an affair of California without first securing the permission of the court; said
with another guy. Margaret applied for divorce in Los Angeles. The LA Court parties are further restrained from keeping the child out of the
granted the divorce on the ground of the wife’s infidelity. The LA Court also issued County of Los Angeles for more than one day without first securing
an interlocutory order awarding the custody of the child with Silvestre. Silvestre the consent of the court. "
brought Querubina in the Philippines. Margaret however was able to obtain a 5. Margaret left San Francisco on November 7, 1949, arriving in Manila on July
modification of the interlocutory order of the LA Court, giving the custody of the 25, 1949. On the 27th of the previous month, she arrived in Caoayan, Ilocos
child to her. Margaret now wants the interlocutory order be enforced in the Sur, where she currently lives, taking with her the Cherubina girl, whom she
Philippines to get the custody of the child. The issue is WoN the interlocutory order brought to the Philippines because, as a father, she wanted to prevent the
should be enforced in the Philippines – NO. An interlocutory decree on the custody unseemly behavior of her own from coming to her attention.
of a minor is not a final decision. Because the interlocutory decree, Exhibit A-1, does mother. Silvestre wanted his daughter to be educated in an environment of
not constitute a final decision, its fulfillment cannot be requested in the Philippines. high morality. (I think it was Silvestre who brought the child to the
Philippines pero as regards the first sentence, the decision said it was
DOCTRINE: Because the interlocutory decree, Exhibit A-1, does not constitute a appellant who left San Francisco eh si Margaret yung appellant pero in the
final decision, its fulfillment cannot be requested in the Philippines. ratio, SC will say na it’s Silvestre idk hahah)
6. At the request of Margaret, the Superior Court of Los Angeles, California, on
The judgments of foreign courts cannot be enforced in the Philippines if they are November 30, 1949, modified her order of April 5, 1949, providing that:
contrary to laws, customs and public order. a. "Under interlocutory decree of March 7, 1949, the child, a girl now
3 1/2 years old, was granted to the husband, but the child was kept
in a neutral home, both parties were given reasonable visitation and
Note: This case is in Spanish. I just used Google Translate.
both were restrained from removing the child out of the state. Deft
FACTS:
has taken the child with him to the Philippine Islands. At time of
1. Silvestre Querubin is from Caoayan, Ilocos Sur, of Filipino parents. In 1926
trial custody he was apparently denied PTF Because she was then a
he left for the United States in order to study but with the purpose of returning
Living With another man. She is now married to this man and They
later to his native country. He obtained the title of "Master of Arts and
have a well equipped home Ptf appears to be a mother, she has one
Sciences" at the "University of Southern California," institution domiciled in
child, the issue of her present marriage, and is also caring for a child
Los Angeles, California, where he began living since 1934.
that was abandoned by certain friends of hers Ptf's husband is
2. On October 20, 1943, Silvestre married Margaret, in Albuquerque, New
regularly and permanently employed Witnesses testified in behalf of
Mexico. As a result of this marriage was born Querubina Querubin.
the ptf in reference to her motherly qualities and the condition of her
3. Margaret filed in 1948 a divorce suit against Silvestre, based on "mental
home, she received the child in question, when the child was in the
cruelty." On February 7, 1948 the divorce was granted to the husband by
neutral home and brought her toys and other articles. ma of on deft's
virtue of a counterclaim filed by him and founded on the wife’s infidelity.
attorneys of record. [I think deft is defendant (Silvestre) while ptf is
4. On April 5, 1949, at the request of Silvestre, the Superior Court of Los
petitioner (Margaret)]
Angeles issued an interlocutory order providing that:
b. "The interlocutory decree is modified so as to provide that custody
a. "(1) The care, custody and control of the minor child of the parties,
of the child shall be granted to ptf and deft shall have the right of
Querubina Querubin, is hereby awarded to Silvestre;
reasonable visitation." Deft shall pay for the support of the child $
b. "(2) Said child is to be maintained in a neutral home, subject to the
30 each month on the 1st day, commencing Jan. 1950. "
right of reasonable visitation on the part of both parties to this action;
7. On the day of the hearing of this case of habeas corpus, Silvestre stated that
 he never tried to change his citizenship; that when he came to the country he has no controlling effects in another state as to facts or conditions arising to
had a P2,000 of savings: that three weeks after his arrival he received an offer the date of the decree; and the courts of the last state may, in proper
to teach with a monthly P250 salary at the school established by Dr. proceedings, award the custody otherwise upon proof of matters subsequent
Sobrepeña in Villasis, Pangasinan; that he has never been deprived to the decree which justifies the change in the interest of the child . "
of parental authority by judicial decision, nor declared absent from the 5. In the present case the circumstances have changed. Cherubina is no longer
Philippines, nor subject to civil interdiction. According to the a quo court, in Los Angeles but in Caoayan, Ilocos Sur. He is under the care of his
Silvestre is irreproachable conduct. father. There is a huge distance from Los Angeles and the present domicile
8. On February 10, 1950, Margaret, through her lawyer, filed a writ of habeas of the minor and the cost of the ticket to that city would be very high, and it
corpus in the CFI Ilocos Sur, claiming custody of her daughter Cherubina, is still possible that this was beyond the reach of Margaret. There is no
alleging as a basis the interlocutory decree of the California court, which evidence that she is able to pay for the travel expenses of the minor and her
granted her such custody. On February 28, 1950, CFI denied the request. companion. She is not a pack of cigarettes that can be mailed to Los Angeles.
9. Margaret maintains that under Article 48 of Rule 39, the Exhibit A-1 decree 6. It does not appear that the circumstances that occurred in November 1949 in
of the Los Angeles Court, California, must be fulfilled in the Philippines. Its Los Angeles, prevailed in the same state until the moment in which the case
operative part says verbatim: "The interlocutory decree is modified so as to was seen in CFI Ilocos Sur. There is also no evidence that Margaret has
provide that custody of the child shall be granted to ptf and deft shall have sufficient funds to pay for the trip of the Cherubina girl from Caoayan, Ilocos
the right of reasonable visitation." Deft shall pay for the support of the child Sur, to Los Angeles, California, and to answer for her food, care and
$ 30 each month on the 1st day, commencing Jan. 1950. " education, and that the father, more than anyone else, is interested in the care
and education of your daughter, and has savings of more than P2,000
ISSUE: deposited in a bank, we believe that the court a quo not wrong to deny the
22. WoN the interlocutory order should be enforced in the Philippines – NO. request.
Because the interlocutory decree, Exhibit A-1, does not constitute a final 7. The Court could not, without satisfactory evidence, dispose without remorse
decision, its fulfillment cannot be requested in the Philippines. of conscience the delivery of the girl to Margaret’s lawyer: it is her obligation
to ensure the safety and well-being of her. It is not just about resolving the
RULING: Petition denied. preferential right of the father and mother in custody. The vital and
transcendental question of the future of the girl is superior to any
RATIO: consideration. The State watches over its citizens. Article 171 of the Civil
1. An interlocutory decree on the custody of a minor is not a final decision. By Code provides that "The Courts may deprive the parents of parental authority,
its nature it is not firm. It is subject to changes as circumstances change. or suspend the exercise of this, if they treat their children with excessive
2. In the first decree, the father was given custody of the minor. At the request harshness, or if they give them orders, advice or corrupting examples."
of the father, the decree of April 5 was issued prohibiting the mother from 8. Article 154 of the Civil Code provides that "The father, and failing the
taking the child to her home because she was again in adulterous relationships mother, have power over their legitimate children not
with another man. When Silvestre was no longer in Los Angeles, because he emancipated." However, if this power is unduly exercised, the courts may
had already come to the Philippines, the last order was enunciated and it was deprive them of it and entrust the care of the minor to other institutions, as
decided that the custody was entrusted to Margaret, paying her the recourse provided in Article 6 of Rule 100.
$30 a month for the maintenance of the child. The pension is not fixed and is 9. In the application filed, there is no allegation that the court a quo has abused
increased or decreased as the pensioner's needs increase or decrease or as the its discretion. This Court should not revoke its performance.
economic conditions of the person giving it demand. 10. At the hearing of the case in the CFI of Ilocos Sur, Silvestre stated that he had
3. Because the interlocutory decree, Exhibit A-1, does not constitute a final brought his daughter to the Philippines because he wanted to prevent her from
decision, its fulfillment cannot be requested in the Philippines. In the knowing about the misconduct and infidelity committed by the mother,
same United States, an interlocutory order can not be requested in the court preventing her from seeing her. live with the man who had offended his
of another state. father. Silvestre said that he wanted his daughter to be raised in an
4. In general, a decree of divorce entrusting the custody of a child of the environment of high morals, and that the wife's infidelity was not indirectly
marriage to one of the spouses is respected by the courts of other states "at sanctioned. Under Divorce Law No. 2710, the guilty spouse has no right to
the time and under the circumstances of its rendition but that such a decree custody of minor children. Current legislation, good customs and the interests
 of public order advise that the girl must be out of the care of a mother who other considerations It is the polar star to guide to the conclusion in all
has violated the oath of allegiance to her husband. We believe that this cases of infants, whether the question is raised upon a writ of habeas
Court should not enforce a decree issued by a foreign court, which corpus or in a court of chancery. '"
contravenes our laws and the sound principles of morality that inform 17. We have already seen that the interlocutory order giving custody of the
our social structure about family relationships. child to the appellant is in conflict with the express provisions of the
11. The judgments of foreign courts cannot be enforced in the Philippines if legislation in force in the Philippines. In the first decree and in the
they are contrary to laws, customs and public order. If such decisions, by amendment, custody of the minor was entrusted to the father and the
the simple theory of reciprocity, judicial courtesy and international civility mother was forbidden, in the amended order, to take the minor to her home
are sufficient basis for our courts to decide in accordance with them, then our because she was again in illegal relationships with another man. But the
courts would be in the poor position of having to issue sentences contrary to last decree amending, contrary to the sense of justice, the law, and morality,
our laws, customs and public order. This is absurd. entrusting the custody of the child who was unfaithful wife because she
12. If the request is granted, the minor would be under the care of her mother was already married to who committed adultery. And under the doctrine of
who was judicially found guilty of conjugal infidelity; he would live under a the comity of nations , Margaret contends that this decree must be fulfilled
roof together with the man who dishonored his mother and offended his in the Philippines. We believe that for the several reasons stated above, the
father; he would play and grow with the fruit of his mother's adulterous claim is unsustainable.
love; I would reach puberty with the idea that a woman who was unfaithful
to her husband has the right to guard her daughter. In such an environment a
girl can not be brought up in a proper way: if she were to know during her
adolescence that her father has been betrayed by her mother with the man
with whom she lives, that girl would live under an impression of moral
inferiority of incalculable consequences , and for that reason he would never
be happy;and if, under the influence of his mother, he came to believe that
the infidelity of a wife is only a transient incident such as changing his
headdress, the girl would go down the path of perdition. And the moral
education your stepfather can give you can hardly be better.
13. If the request is denied, the girl would live with her father with the benefit of
exclusive paternal care, and not with the divided attention of a mother who
has to attend to her husband, her two daughters and a third girl, the protected
one. For the welfare of the youngest Cherub, which is what matters most in
the present case, its custody by the father should be considered preferred.
14. Margaret as a last resort, invokes the comity of nations.
15. Reciprocity, courtesy between nations is not absolute. It governs when there
is a treaty and there is equality of legislation. The doctrine of reciprocity is
adopted when the foreign court has jurisdiction to hear the case, the parties
have appeared and discussed the matter in substance. Sometimes it is granted
as a privilege but not as a strict right. The requested courtesy has not been
recognized by this Court when I declare that the rights and duties of the
family, state, condition and legal capacity of the persons are governed by the
laws of the Philippines and not by those of America and He did not validate
the decision of the Supreme Court of Hong Kong because it was mistaken in
its conclusions of fact and law. reciprocity between states of the American
Union is not absolute. It is not an unbreakable rule.
16. "'Comity can not be considered in this case, when the future welfare of the
child is the vital question in the case The good of the child is superior to all
 008 BORTHWICK v CASTRO-BARTOLOME (GUSTILO) The issue is WoN foreign judgment against a person rendered without jurisdiction
July 23, 1987| Narvasa, J. | Recognition and Enforcement of Foreign Judgment over the cause of action and without proper summons to the defendant enforceable in
PETITIONERS: William Borthwick the Philippines?- Yes
RESPONDENTS: Hon. Floreliana Castro-Bartolome, Presiding Judge Br XV, The Court held that In the case at bar, the jurisdiction of the Circuit Court of Hawaii
Makati, CFI of Rizal, Joseph Scallon and Jewell Scallon hinged entirely on the existence of either of two facts in accordance with its State
SUMMARY: The action commenced in the Circuit Court of the First Circuit, State laws, i.e., either Borthwick owned real property in Hawaii, or the promissory notes
of Hawaii, U.S.A.,Joseph E. Scallon (J. Scallon) sought to Compel payment by sued upon resulted from his business transactions therein. Scallon's complaint clearly
William B. Borthwick (Borthwick) on four (4) promissory notes in the amounts of alleged both facts. Borthwick was accorded opportunity to answer the complaint and
$32,408.95, $29,584.94, $2,832.59 and $40,000.00, plus stipulated interest. Scallon's impugn those facts, but he failed to appear and was in consequence declared in
complaint alleged, inter alia, that Borthwick, an American citizen living in the default. There thus exists no evidence in the record of the Hawaii case upon which to
Philippines, owned real property interests in Hawaii where he last resided and lay a conclusion of lack of jurisdiction, as Borthwick now urges.
transacted business therein; that business dealings which transpired in Honolulu, There was therefore no error committed by the Trial Court when it denied
Hawaii had given rise to the promissory notes sued upon, and Borthwick had failed Borthwick's motion to lift the order of default (which is what the motion for new trial
to pay the sums thereunder owing upon maturity and despite demand. actually is) because Borthwick had failed to establish any proper ground therefor.
Borthwick being then in Monterey, California, summons was served upon him DOCTRINE: It is true that a foreign judgment against a person is merely
personally in that place, pursuant to Hawaiian law allowing service of process on a "presumptive evidence of a right as between the parties," and rejection thereof may
person outside the territorial confines of the State, if he had otherwise submitted be justified, among others, by "evidence of a want of jurisdiction" of the issuing
himself to the jurisdiction of its courts as to causes of action arising from, among authority, under Rule 39 of the Rules of Court. It is plain that what Borthwick seeks
others, the act of transacting any business within Hawaii, alleged to consist as to in essence is one more opportunity, a third, to challenge the jurisdiction of the
Borthwick in the negotiation and dealings regarding the promissory notes. Hawaii Court and the merits of the cause of action which that Court had adjudged to
Borthwick ignored the summons. Default was entered against him, and in due course have been established against him. This he may obtain only if he succeed in showing
a default judgment was rendered. However, Scallon's attempts to have the judgment that the declaration of his default was incorrect. He has unfortunately not been able
executed in Hawaii and California failed, because no assets of Borthwick could be to do that; hence, the verdict must go against him.
found in those state. Scallon and his wife, Jewell, then came to the Philippines and
on March 15, 1980 brought suit against Borthwick in the Court of First Instance of FACTS:
Makati, seeking enforcement of the default judgment of the Hawaii Court and 71. By action commenced in the Circuit Court of the First Circuit, State of Hawaii,
asserting two other alternative causes of action. U.S.A.,Joseph E. Scallon (J. Scallon) sought to Compel payment by William B.
The sheriff's initial efforts to serve summons on Borthwick personally at his address Borthwick (Borthwick) on four (4) promissory notes in the amounts of
at 861 Richmond St., Greenhills, Mandaluyong, Metro Manila having been $32,408.95, $29,584.94, $2,832.59 and $40,000.00, plus stipulated interest.
unsuccessful-Borthwick was "always out on official business"-the sheriff effected Scallon's complaint alleged, inter alia, that Borthwick, an American citizen
substituted service by leaving a copy of the summons and the complaint with living in the Philippines, owned real property interests in Hawaii where he
Borthwick's "house caretaker," a man named Fred Daniel. last resided and transacted business therein; that business dealings which
As to Borthwick's attack on the validity of the foreign judgment, the Trial Court transpired in Honolulu, Hawaii had given rise to the promissory notes sued
ruled that "under the (Hawaii Revised Statute) cited by the defendant the Hawaii upon, and Borthwick had failed to pay the sums thereunder owing upon
Court has jurisdiction" because the factual premises upon which the exercise of such maturity and despite demand.
jurisdiction was based "had not been refuted by the defendant" although he "appears 72. Attached to the complaint were the promissory notes, which although uniformly
to be a lawyer, and the summons in the Hawaii case was served personally on specifying the city of Palos Verdes, Los Angeles, California as the place of
Borthwick." payment, also provided that: “in the event that payment *** shall not have been
Finally, the Trial Court disposed of Borthwick's other defenses saying that the made in full on or before the maturity date *** at *** (such) place ***, payee
present action "is for the enforcement of a foreign judgment" where the validity of may select, at his option, Manila, Philippines, or Honolulu, Hawaii as additional
his defenses to the original action is immaterial. places for payment *** and *** any court in any of said places having jurisdiction
over the subject matter shall be a proper Court for the trial of any action brought
 to enforce payment of this note and the law of the place in which said action is Court has jurisdiction" because the factual premises upon which the exercise of
brought shall apply.” such jurisdiction was based "had not been refuted by the defendant" although he
73. Borthwick being then in Monterey, California, summons was served upon him "appears to be a lawyer, and the summons in the Hawaii case was served
personally in that place, pursuant to Hawaiian law allowing service of process on personally on Borthwick." Finally, the Trial Court disposed of Borthwick's other
a person outside the territorial confines of the State, if he had otherwise submitted defenses saying that the present action "is for the enforcement of a foreign
himself to the jurisdiction of its courts as to causes of action arising from, among judgment" where the validity of his defenses to the original action is immaterial.
others, the act of transacting any business within Hawaii, alleged to consist as to 82. Borthwick proceeded directly to this Court and filed a petition for review.
Borthwick in the negotiation and dealings regarding the promissory notes.
Borthwick ignored the summons. Default was entered against him, and in due ISSUE: WoN foreign judgment against a person rendered without jurisdiction over
course a default judgment was rendered (look at default judgment at the end the cause of action and without proper summons to the defendant enforceable in the
IMPT) Philippines?- Yes because of the failure to establish a proper ground.
74. However, Scallon's attempts to have the judgment executed in Hawaii and
California failed, because no assets of Borthwick could be found in those state. RULING: WHEREFORE, the petition for review is denied, with costs against
Scallon and his wife, Jewell, then came to the Philippines and on March 15, 1980 petitioner.
brought suit against Borthwick in the Court of First Instance of Makati, seeking
enforcement of the default judgment of the Hawaii Court and asserting two other RATIO:
alternative causes of action. 127. It is true that a foreign judgment against a person is merely "presumptive evidence
75. The sheriff's initial efforts to serve summons on Borthwick personally at his of a right as between the parties," and rejection thereof may be justified, among
address at 861 Richmond St., Greenhills, Mandaluyong, Metro Manila having others, by "evidence of a want of jurisdiction" of the issuing authority, under Rule
been unsuccessful-Borthwick was "always out on official business"-the sheriff 39 of the Rules of Court.
effected substituted service by leaving a copy of the summons and the complaint 128. In the case at bar, the jurisdiction of the Circuit Court of Hawaii hinged
with Borthwick's "house caretaker," a man named Fred Daniel. entirely on the existence of either of two facts in accordance with its State
76. Borthwick filed no answer to the Scallons' complaint. He was declared in default. laws, i.e., either Borthwick owned real property in Hawaii, or the promissory
After due proceedings judgment by default was rendered against him. Again, it notes sued upon resulted from his business transactions therein. Scallon's
was with Fred Daniel, Identifying himself as Borthwick's "houseboy," that a copy complaint clearly alleged both facts. Borthwick was accorded opportunity to
of the decision was left. answer the complaint and impugn those facts, but he failed to appear and
77. No response from Borthwick was forthcoming until after the Court subsequently was in consequence declared in default. There thus exists no evidence in the
amended its judgment so as to make the sums due under the Hawaii Court decision record of the Hawaii case upon which to lay a conclusion of lack of
payable in their equivalent in Philippine currency.Notice of this amendatory order jurisdiction, as Borthwick now urges.
was somehow personally accepted by Borthwick at this time. 129. The opportunity to negate the foreign court's competence by proving the non-
78. Borthwick then moved for a new trial, claiming that it was by accident, mistake existence of said jurisdictional facts established in the original action, was again
and excusable negligence that his "off and on itinerant gardener," Daniel, failed afforded to Borthwick in the Court of First Instance of Makati, where enforcement
to transmit the summons to him, which omission consequently prevented of the Hawaii judgment was sought.
Borthwick from knowing of the judicial proceedings against him. 130. This time it was the summons of the domestic court which Borthwick chose to
79. Alleging too that "the promissory notes did not arise from business dealings in ignore, but with the same result: he was declared in default. And in the default
Hawaii,” nor "did he own real estate" therein, Borthwick contended that the judgment subsequently promulgated, the Court a quo decreed enforcement of the
judgment sought to be enforced was invalid for want of jurisdiction of the Hawaii judgment affirming among others the jurisdictional facts, that Borthwick owned
Court over the cause of action and over his person. real property in Hawaii and transacted business therein.
80. The motion for new trial was denied by the Trial Court upon the factual finding 131. It is plain that what Borthwick seeks in essence is one more opportunity,
that "Fred Daniel is a responsible person" "of suitable age and discretion" a third, to challenge the jurisdiction of the Hawaii Court and the merits of
"resident of the address of the defendant" on whom substituted service of the cause of action which that Court had adjudged to have been established
summons had been duly made. against him. This he may obtain only if he succeed in showing that the
81. As to Borthwick's attack on the validity of the foreign judgment, the Trial Court declaration of his default was incorrect. He has unfortunately not been able
ruled that "under the (Hawaii Revised Statute) cited by the defendant the Hawaii to do that; hence, the verdict must go against him.
132. It is not for this Court to disturb the express finding of the Court of First Instance
that Daniel was Borthwick's resident domestic houseboy, and of sufficient age
and discretion to accept substituted service of summons for Borthwick. Under
Rule 42 of the Rules of Court, a party appealling from the Courts of First
Instance (now the Regional Trial Courts) to the Supreme Court may "raise
only questions of law and no other question and is thus precluded from
impugning the factual findings of the trial court, being deemed to have
admitted the correctness of such findings and waived his right to open them
to question.
133. In any case, a review of the records shows that the Trial Court was correct in
refusing to believe Borthwick's representation that "Daniel gardens at the
residence of Borthwick, then goes home to La Union after gardening
itinerantly." As said Court observed, that situation is "ridiculous," it being
"queer and hardly coincidental why on all papers served on the defendant, it
was Fred Daniel who signed and acknowledged receipt.
134. There was therefore no error committed by the Trial Court when it denied
Borthwick's motion to lift the order of default (which is what the motion for new
trial actually is) because Borthwick had failed to establish any proper ground
therefor.

Decision of the Court of Hawaii: “1. The decision of the Court of Hawaii in Civil Case No.
56660 reading: IT IS HEREBY ORDERED, ADJUDGED AND DECREED that Plaintiff
JOSEPH E. SCALLON recover from Defendant WILLIAM B. BORTHWICK the sum of
$104,817.48 together with interest in the sum of $41,807.93, costs of Court in the sum of $37.00
and attorney's fees in the sum of $4,290.64 for a total sum of $150,53.05, may be, as it is hereby
ordered, enforced in the Philippines.

The second alternative cause of action in the event that the satisfaction of the said judgment
becomes impossible, the rescission of the agreement of the parties is hereby granted. Defendant
Borthwick is hereby ordered: (a) To return and deliver to plaintiffs Joseph and Jewell Scallon
their 800 shares of stock of Manila Memorial Park Cemetery, Inc. and 180 shares of stock of
Trans-Pacific Development Management Corporation, together with any and/or all stock
dividends, cash dividends and similar corporate distributions accruing to said shares of stock
from and after December 3, 1973; (b) In the event that such shares cannot be returned and
delivered, to pay to plaintiff Scallon the value of the same from the execution of the agreement,
Exh. L, together with any increase in value from the said date to the finality of this judgment.
 009 Philippine International Shipping v. CA (Hilario) 2) WoN the New York judgment is binding against the guarantors in the
April 26, 1989 | Feliciano, J. | Enforcement of Foreign Judgment, Permissive Joinder complaint for execution of foreign judgement—YES, because of Rule 3 Section
of Parties 6 they are deemed persons in whom or against whom any right to relief in respect
to or arising out of the same transaction or series of transactions is alleged to
PETITIONER: PHILIPPINE INTERNATIONAL SHIPPING exist, whether jointly, severally, or in the alternative.
CORPORATION (PISC), GEORGE LIM, MARCOS BAUTISTA, CARLOS
LAUDE, TAN SING LIM, ANTONIO LIU LAO, ONG TEH, PHILIPPINE
CONSORTIUM CONSTRUCTION CORPORATION, PACIFIC MILLS, INC., DOCTRINE: That foreign judgment which had become final and executory, is
and UNIVERSAL STEEL SMELTING CO., INC. thus "presumptive evidence of a right as between the parties and their successors
RESPONDENTS: THE HON. COURT OF APPEALS, HON. JOSE C. DE in interest by a subsequent title."
GUZMAN, as Judge presiding Branch 93 of the Regional Trial Court of Quezon
City, INTERPOOL, LTD. and SHERIFF NORBERTO V. DOBLADA JR. There is no need to implead guarantors in the foreign case, because once u enforce
the judgment in the Philippines they may be joined as parties under permissive
SUMMARY: Philippine International Shipping Corporation (PISC) leased
joinder of parties under our ROC.
several containers from Interpool, a foreign corporation duly organized under the
laws of the Bahamas Islands with office and business in NYC, not licensed and
not doing business in PH. The other companies and people under “petitioners”
are guarantors and agreed to pay Interpool in case of any liability or default by
PISC. True enough PISC defaulted and Interpool sent them all demand letters, FACTS:
which were all unheeded. This forced Interpool to file a case before the Southern 56. Interpool is a foreign corporation duly organized under the laws of the
District Court of New York in the US, and it obtained a default judgment in its Bahamas Islands with office and business address in New York, and not
favor. Interpool filed a complaint for enforcement of the New York judgment licensed to do and not doing business in the Philippines.
before the RTC of Quezon City. PISC and its guarantors failed to file and Answer 57. Philippine International Shipping Corporation (PISC), Philippine
(despite asking for an extension), so Interpool moved to declare them in default. Construction Consortium Corp., Pacific Mills Inc., and Universal Steel
This was granted by the RTC and Interpool was allowed to present evidence ex Smelting Company Inc. are corporations organized under Philippine law. The
parte. PISC and its guarantors appealed before the CA, which was denied. This other defendants (included in the parties appealing) are all Philippine
became final, so Interpool moved for execution. This was granted. PISC and its Residents.
guarantors filed a petition to annul judgment before the CA, but this was denied 58. PISC leased from Interpool and its wholly owned subsidiary Container
hence this petition for review before the SC. Trading Corp. several containers pursuant to the Membership Agreement and
Issues: Hiring Conditions, and the Master Equipment Leasing Agreement.
1) WoN the New York Court acquired jurisdiction over PISC under the a. The other three companies (Phil. Construction Universal Steel
procedural law of the forum – YES, the records show that summons and the Pacific Mills) guaranteed to pay Interpool and Container Trading
complaint filed before the New York Court had been received by PISC Manila Corp. should PISC default or should any liability arise.
office and by its agent in New York. That foreign judgment which had become b. George Lim, Marcos Bautista, Carlos Laude, Tan Sing Lim,
final and executory, is thus "presumptive evidence of a right as between the Antonio Liu Lao, and Ong Teh unconditionally and irrevocably
parties [i.e., PISC and Interpool] and their successors in interest by a guaranteed to pay Interpool and Container Trading arising from the
subsequent title." We note, further that there has been in this case no showing failure of PISC to perform any of its obligations under the
by petitioners that the Default Judgment rendered by the U.S. District Court Agreements.
was vitiated by "want of notice to the party, collusion, fraud, or clear mistake 59. From 1979 to 1981 PISC incurred outstanding and unpaid obligations
of law or fact. " In other words, the Default Judgment imposing upon petitioner amounting to $94k usd, representing unpaid per diems, drop off charges,
PISC a liability of U.S.$94,456.28 in favor of respondent Interpool, is valid and interest, and other agreed charges.
may be enforced in this jurisdiction. 60. Interpool sent demand letters to PISC and its guarantors, but these were
unheeded. This forced Interpool to file a case against PISC before the US
Southern District Court of New York.
 61. Interpool obtained a Default Judgment in its favor against PISC, ordering the RULING: ACCORDINGLY, the Petition for Review is DENIED and the Decision
latter to pay $94k due. dated 12 December 1986 of the Court of Appeals in C.A.-G.R. SP No. 10614, is hereby
62. Because of the unjustifiable failure and refusal of PISC and its guarantors to AFFIRMED. This Resolution is immediately executory. Costs against petitioners.
pay their obligations, Interpool filed a complaint before Branch 93 RTC
Quezon City to enforce the default judgment of the US District Court and RATIO:
also to enforce the individually executed Continuing Guarantees of the other New York court validly acquired jurisdiction over PISC under its procedural law
defendants. 58. Evidence of the record clearly shows that the US District Court validly
63. PISC and its guarantors were all duly summoned but they failed to answer. acquired jurisdiction over PISC under its procedural law.
64. Interpool moved to declare PISC and its guarantors in default. This was 59. Copies of the Summons and Complaint, which were attached to the
granted by the RTC, and Interpool was allowed to present its evidence ex Petition for Review filed with the SC, were stamped “Received, 18 Jan
parte. 1983 PISC Manila” indicating that service had been made upon and
65. The RTC rendered judgment in favor of Interpool. acknowledged by the PISC office in Manila, and that PISC had actual
66. PISC and its guarantors appealed the decision before the CA. notice.
67. The CA dismissed the appeal for failure of PISC and its guarantors to pay the 60. Moreover, copies of said Summons and Complaint had likewise been
docket fee despite their receipt of the notice to do so. Final resolution was served upon Prentice-Hall Corporation System, Inc. (New York),
entered. petitioner PISCs agent, expressly designated by it in the Master
68. In view of the finality of the decision, Interpool moved for execution and for Equipment Leasing Agreement with respondent Interpool. "for the
appointment of a special sheriff to enforce it. The trial court issued an order purpose of accepting service of any process within the State of New York,
of execution and appointed a sheriff. USA with respect to any claim or controversy arising out of or relating
69. PISC and its guarantors filed a Petition to Annul Judgment before the CA, to directly or indirectly, this Lease."
directed at the Order of Execution issued by the RTC. 61. Records also show that PISC filed a motion to dismiss (not on jurisdictional
70. The CA denied the petition and the subsequently filed MR, so they filed this grounds), but was denied by the US District Court.
Petition for Review before the SC alleging the ff: 62. All of the foregoing matters, which were stated specifically in the U.S.
a. Both default judgments rendered against them are null and void District Court's disputed Default Judgement, have not been disproven or
because the New York court failed to acquire jurisdiction over their otherwise overcome by PISC and its guarantors, whose bare and
persons (they were never served with summons), and this defect unsubstantiated allegations cannot prevail over clear and convincing
prevented the RTC of Quezon City from taking cognizance of the evidence of record to the contrary.
complaint and enforcing the US judgment against them. 63. That foreign judgment which had become final and executory, no appeal
b. Assuming the default judgment is valid, it can only be enforced having been taken therefrom and perfected by petitioner PISC, is thus
against PISC, and not against the guarantors because they were not "presumptive evidence of a right as between the parties [i.e., PISC and
impleaded originally in the New York case. Interpool] and their successors in interest by a subsequent title."
64. We note, further that there has been in this case no showing by petitioners
ISSUE/s: that the Default Judgment rendered by the U.S. District Court was
17. WoN the New York Court acquired jurisdiction over PISC under the vitiated by "want of notice to the party, collusion, fraud, or clear mistake
procedural law of the forum – YES, the records show that summons and the of law or fact. " In other words, the Default Judgment imposing upon
complaint filed before the New York Court had been received by PISC petitioner PISC a liability of U.S.$94,456.28 in favor of respondent Interpool,
Manila office and by its agent in New York. is valid and may be enforced in this jurisdiction.
18. WoN the New York judgment is binding against the guarantors in the New York judgment is binding against the guarantors
complaint for execution of foreign judgement—YES, because of Rule 3 1. The existence of PISC’s liability having been duly established in the U.S.
Section 6 they are deemed persons in whom or against whom any right to case, it was correct and proper for Interpool, in seeking enforcement in this
relief in respect to or arising out of the same transaction or series of jurisdiction of the foreign judgment imposing such liability, to have include
transactions is alleged to exist, whether jointly, severally, or in the the guarantors as defendants.
alternative. 2. Rule 3 Section 6 of the Revised Rules of Court expressly provides: Sec. 6.
Permissive joinder of parties. All persons in whom or against whom any
 right to relief in respect to or arising out of the same transaction or series of
transactions is alleged to exist, whether jointly, severally, or in the
alternative, may, except as otherwise provided in these rules, join as plaintiffs
or be joined as defendants in one complaint, where any question of law or
fact common to all such plaintiffs or to all such defendants may arise in the
action; but the court may make such orders as may be just to prevent any
plaintiff or defendant from being embarrassed or put to expense in connection
with any proceedings in which he may have no interest.
3. The record shows that the 9 other parties had executed continuing
guarantees to secure performance by PISC of its contractual obligations.
As guarantors, they had held themselves out as liable, "whether jointly,
severally, or in the alternative," to respondent Interpool under their separate
"continuing guarantees" executed in the Philippines, for any breach of those
Agreements on the part of PISC.
4. The liability of the guarantors is not based upon the Membership Agreement
and the Master Equipment Leasing Agreement to which they were not parties,
but based on the continuing guaranty.
5. We, therefore, consider the nine (9) other petitioners as persons against
whom a right to relief in respect to or arising out of the same transaction
or series of transactions has been alleged to exist." as contemplated in the
Rule quoted above and, consequently, properly impleaded as defendants in
Civil Case in the RTC.
6. There was, in other words, no need at all, in order that Civil Case in the
RTC would prosper, for respondent Interpool to have first impleaded
the guarantors in the New York case and there obtain judgment against
PISC and the guarantors.
 010 NORTHWEST ORIENT AIRLINES VS. CA (HIRANG) Sharp was formed under the laws of PH, the fact that it maintains and operates 4
9 February 1995 |Padilla, Jr., J. | Recognition and Enforcement of Foreign Judgment branches in Japan deems it a resident of Japan and as such, under its jurisdiction.
and Foreign Arbitral Awards
DOCTRINE: A foreign judgment is presumed to be valid and binding in the country
PETITIONER: NORTHWEST ORIENT AIRLINES, INC from which it comes, until the contrary is shown. It is also proper to presume the
regularity of the proceedings and the giving of due notice therein
RESPONDENT: COURT OF APPEALS and C.F. SHARP & COMPANY INC
FACTS:
SUMMARY: Northwest is a corporation organized under the laws of Minnesota 1. Petitioner Northwest Orient Airlines, Inc. (NORTHWEST), a corporation
while Sharp is a corporation organized under the law of the Philippines. In this cae, organized under the laws of the State of Minnesota, U.S.A., sought to enforce
the two corp entered into an International Passenger Sales Agency Agreement, in Civil Case No. 83-17637 of the Regional Trial Court (RTC), Branch 54,
whereby the Northwest authorized the Sharp to sell its air transportation tickets. Manila, a judgment rendered in its favor by a Japanese court against private
However, Sharp wasn’t able to remit the proceeds thus, Northwest sued Sharp in respondent C.F. Sharp & Company, Inc., (SHARP), a corporation
Tokyo, Japan, for collection of the unremitted proceeds. (Sharp was operating 4 incorporated under Philippine laws
branches in Japan) Summons were issued against Sharp in one of its branches 2. On May 9, 1974, Northwest and Sharp, through its Japan branch, entered into
however, Mr. Dinozo, the person believed to be authorized to receive court processes, an International Passenger Sales Agency Agreement, whereby the Northwest
was in Manila. When he came back, writ of summons was again issued to him by authorized the Sharp to sell its air transportation tickets. However, Sharp
now he refused and claims that he no longer works as an employee of Sharp. Due to wasn’t able to remit the proceeds thus, Northwest sued Sharp in Tokyo,
this the Tokyo Court decided to have the summons issued at the main office of Sharp Japan, for collection of the unremitted proceeds.
in Manila. This was coursed through the SC of Japan then to the DFA and eventually 3. A writ of summons was issued by the 36th Civil Department, Tokyo District
was received by the Sheriff of the RTC of Manila. Sharp was unable to appear during Court of Japan against defendant at its office at the Taiheiyo Building, 3rd
the hearing thus Tokyo Court rendered a decision in favor of Northwest. Northwest floor, 132, Yamashita-cho, Naka-ku, Yokohoma, Kanagawa Prefecture
then filed a suit for the enforcement of judgement but Sharp, in its answer, argued however, this was unsuccessful as Mr. Dinozo, the person believed to be
that the the foreign judgment sought to be enforced is null and void for want of authorized to receive court processes, was in Manila.
jurisdiction. The trial court and CA ruled in favor of Sharp (PLEASE READ FACT 4. When Mr. Dinozo returned, writ of summons was again issued to him by now
10 and 11) basically stating that the since the case was in personam, the judgment he refused and claims that he no longer works as an employee of Sharp.
was void as the process of the Court of Japan cannot be given effect outside its 5. After the two attempts of service were unsuccessful, the judge of the Tokyo
territorial jurisdiction. The issue in this case is WoN the court of Japan validly District Court decided to have the complaint and the writs of summons served
acquired jurisdiction over Sharp and the court ruled in the affirmative. The SC said at the head office of the defendant in Manila. It requested the SC of Japan to
that in the case at bar, processual presumption applies. In rendering the judgment serve the summons through diplomatic channels upon the defendant's head
void, it is the burder of the party attacking its validity to prove that such is null and office in Manila.
void. It is settled that matters of remedy and procedure such as those relating to the 6. Deputy Sheriff Rolando Balingit received the the writ of summons. However,
service of process upon a defendant are governed by the lex fori or the internal law Sharp failed to appear at the scheduled hearing. Thus, the Tokyo Court
of the forum Thus, it is encumbent upon Sharp to show that the judgment in void proceeded to hear the plaintiff's complaint and rendered judgment ordering
under the Japanese Laws. However, such law was not proven thus, it would be the Sharp to pay the Northwest the sum of 83,158,195 Yen plus interest.
presumed that the Japanese Laws are the same as PH laws. Section 14, Rule 14 of the 7. Northwest was unable to execute the decision in Japan, hence, a suit for
Rules of Court provides for the procedure on how to serve summons to foreign enforcement of the judgment was filed by it before the Regional Trial Court
corporations doing business in the PH. In the case at bar, nowhere in its pleadings did of Manila Branch 54
SHARP profess to having had a resident agent authorized to receive court processes 8. Sharp filed its answer averring that the judgment of the Japanese Court
in Japan. Therefore, service on the designated government official or on any of sought to be enforced is null and void and unenforceable in this
SHARP's officers or agents in Japan could be availed of. Furthermore, the court also jurisdiction having been rendered without due and proper notice to the
said that a corporation formed in one-state may, for certain purposes, be regarded a defendant and/or with collusion or fraud and/or upon a clear mistake of
resident in another state in which it has offices and transacts business. Thus, even if law and fact
9. Trial ensued after failure of settling the case amicably. After the Northwest ii. But even assuming a distinction between a resident
rested its case, Sharp filed a Motion for Judgment on a Demurrer to defendant and non-resident defendant were to be adopted,
Evidence based on two grounds: such distinction applies only to natural persons and not
(1) the foreign judgment sought to be enforced is null and void for want in the corporations
of jurisdiction and (2) the said judgment is contrary to Philippine law iii. Jurisprudence holds that the foreign or domestic character
and public policy and rendered without due process of law. of a corporation is to be determined by the place of its
10. The trial court ruled in favor of Sharp stating that: origin where its charter was granted and not by the
a. the foreign judgment sought to be enforced is null and void for location of its business activities. A corporation is a
lack of jurisdiction due to the fact that the case being in personam, "resident" and an inhabitant of the state in which it is
the Japanese Court did not acquire jurisdiction over the person incorporated and no other thus, Sharp is a resident of
of the Sharp because jurisprudence requires that the defendant the PH. This does not change even if Sharp maintains 4
be served with summons in Japan in order for the Japanese branches in Japan.
Court to acquire jurisdiction over it. iv. On this premise, Sharp is a non-resident corporation. As
b. The process of the Court in Japan sent to the Philippines which such, court processes must be served upon it at a place
is outside Japanese jurisdiction cannot confer jurisdiction over within the state in which the action is brought and not
the defendant in the case before the Japanese Court of the case elsewhere
at bar. 12. NORTHWEST elevated the case to the SC contending that the CA erred in
c. Since Northwest alleges that the Japanese Court acquired holding that SHARP was not a resident of Japan and that summons on
jurisdiction because the Sharpt is a resident of Japan, having SHARP could only be validly served within that country.
four (4) branches doing business therein, then all the more
reason for the summons to be served in Japan in any of these ISSUE/s:
alleged four branches WoN the Japanese court validly acquired Jurisdiction over Sharp – YES.
11. Upon appeal, the CA affirmed the decision of the trial court stating that: Under processual presumption, Japanese law are presumed to be the same as
a. In the case of Boudard vs.Tait it was held that "the process of the that of PH laws. In this case, the PH laws allow service of summons to
court has no extraterritorial effect and no jurisdiction is designated government official or on any of SHARP's officers or agents
acquired over the person of the defendant by serving him in Japan.
beyond the boundaries of the state
b. In an action strictly in personam, such as the instant case, personal RULING: WHEREFORE, the instant petition is partly GRANTED, and the
service of summons within the forum is required for the court challenged decision is AFFIRMED insofar as it denied NORTHWEST's claims for
to acquire jurisdiction over the defendant attorney’s fees, litigation expenses, and exemplary damages but REVERSED insofar
c. Northwest argues that although the collection suit was in personam, as in sustained the trial court's dismissal of NORTHWEST's complaint.
distinction must be made between an action in personam against a
resident defendant and an action in personam against a non-resident RATIO:
defendant. Jurisdiction is acquired over a non-resident defendant
only if he is served personally within the jurisdiction of the court 1. Under Section 3 of Rule 131, a court, whether of the Philippines or elsewhere,
and over a resident defendant if by personal, substituted or enjoys the presumption that it was acting in the lawful exercise of jurisdiction
constructive service conformably to statutory authorization. Since and has regularly performed its official duty.
Sharp is a resident of Japan then the service of summons made 2. Consequently, the party attacking a foreign judgment has the burden of
through diplomatic channel is valid. overcoming the presumption of its validity. Sharp had the duty to demonstrate
i. CA replied: It is a general rule that processes of the court the invalidity of such judgment. To discharge that burden, it contends that the
cannot lawfully be served outside the territorial limits extraterritorial service of summons effected at its home office in the
of the jurisdiction of the court from which it and this Philippines was not only ineffectual but also void, and the Japanese Court did
is regardless of the residence or citizenship of the party not, therefore acquire jurisdiction over it
thus served 3. It is settled that matters of remedy and procedure such as those relating
 to the service of process upon a defendant are governed by the lex fori or Executive Judge of the Court of First Instance (now Regional Trial Court) of
the internal law of the forum. In this case, it is the procedural law of Manila, who forthwith ordered Deputy Sheriff Rolando Balingit to serve the
Japan where the judgment was rendered that determines the validity of same on SHARP at its principal office.
the extraterritorial service of process on SHARP 10. Moreover, the principle that there can be no jurisdiction in a court of a
4. It was then incumbent upon SHARP to present evidence as to what that territory to render a personal judgment against anyone upon service made
Japanese procedural law is and to show that under it, the assailed outside its limits was applicable alike to cases of residents and non-residents
extraterritorial service is invalid. It did not. Accordingly, the presumption of was already overturned in the 1940 case of Milliken vs. Meyer wherein the
validity and regularity of the service of summons and the decision thereafter US court stated that domicile in the state is alone sufficient to bring an
rendered by the Japanese court must stand. absent defendant within the reach of the state's jurisdiction for purposes
5. Thus, in the light of the absence of proof regarding Japanese of a personal judgment by means of appropriate substituted service or
law, processual presumption may be invoked. Applying it, the Japanese personal service without the state
law on the matter is presumed to be similar with the Philippine law on 11. The domicile of a corporation belongs to the state where it was
service of summons on a private foreign corporation doing business in incorporated. In a strict technical sense, such domicile as a corporation may
the Philippines have is single in its essence and a corporation can have only one domicile
6. Section 14, Rule 14 of the Rules of Court provides that: which is the state of its creation
“if the defendant is a foreign corporation doing business in the 12. Nonetheless, a corporation formed in one-state may, for certain
Philippines, service may be made: (1) on its resident agent designated purposes, be regarded a resident in another state in which it has offices
in accordance with law for that purpose, or, (2) if there is no such and transacts business. This is the rule in our jurisdiction and was used in
resident agent, on the government official designated by law to that the case of State Investment House, Inc, vs. Citibank, N.A
effect; or (3) on any of its officers or agents within the Philippines. If
13. In as much as SHARP was admittedly doing business in Japan through its
the foreign corporation has designated an agent to receive summons,
the designation is exclusive, and service of summons is without force four duly registered branches at the time the collection suit against it was
and gives the court no jurisdiction unless made upon him. Where the filed, then in the light of the processual presumption, SHARP may be
corporation has no such agent, service shall be made on the government deemed a resident of Japan, and, as such, was amenable to the
official designated by law, to wit: (a) the Insurance Commissioner in the jurisdiction of the courts therein and may be deemed to have assented to
case of a foreign insurance company; (b) the Superintendent of Banks, in the said courts' lawful methods of serving process
the case of a foreign banking corporation; and (c) the Securities and 14. Accordingly, the extraterritorial service of summons on it by the Japanese
Exchange Commission, in the case of other foreign corporations duly Court was valid not only under the processual presumption but also because
licensed to do business in the Philippines: of the presumption of regularity of performance of official duty
7. Nowhere in its pleadings did SHARP profess to having had a resident
agent authorized to receive court processes in Japan. This silence could
only mean, or least create an impression, that it had none. Hence, service
on the designated government official or on any of SHARP's officers or
agents in Japan could be availed of.
8. As found by the CA, two attempts at service were made at SHARP's
Yokohama branch. Both were unsuccessful. On the first attempt, Mr. Dinozo,
who was believed to be the person authorized to accept court process, was in
Manila. On the second, Mr. Dinozo was present, but to accept the summons
because, according to him, he was no longer an employee of SHARP
9. Due to the failure, Tokyo District Court ordered that summons for SHARP
be served at its head office in the Philippines. It requested the SC of Japan to
cause the delivery of summons which was coursed through the Ministry of
Foreign Affairs of Japan which, in turn, forwarded the same to the Japanese
Embassy in Manila. Thereafter, the court processes were delivered to the
Ministry (now Department) of Foreign Affairs of the Philippines, then to the
 011 PHILSEC INVESTMENT CORP. vs. COURT OF APPEALS purpose to initiate a separate action or proceeding for enforcement of the foreign
(Esguerra edited by Kat) judgment. What is essential is that there is opportunity to challenge the foreign
G.R. No. 103493 | June 19, 1997 | Mendoza , J. | Jurisdiction over the person judgment, in order for the court to properly determine its efficacy. This is because
in this jurisdiction, with respect to actions in personam, as distinguished from actions
PETITIONERS: PHILSEC INVESTMENT CORPORATION, BPI-
in rem, a foreign judgment merely constitutes prima facie evidence of the justness
INTERNATIONAL FINANCE LIMITED, and ATHONA HOLDINGS, N.V.
RESPONDENTS: THE HONORABLE COURT OF APPEALS, 1488, INC., DRAGO of the claim of a party and, as such, is subject to proof to the contrary.
DAIC, VENTURA O. DUCAT, PRECIOSO R. PERLAS, and WILLIAM H. CRAIG
FACTS:
SUMMARY: Ducat obtained $2.5M loans from Ayala and PHILSEC. Respondent 1488, 6. On January 15, 1983, Ducat obtained separate loans from Ayala International
Inc. assumed Ducat’s obligation under an Agreement, whereby 1488 executed a Finance and PHILSEC Investment in the sum of US$2.5M, secured by shares
Warranty Deed, by which the latter sold a parcel of land to ATHONA for $2.8M [$2.5M of stock owned by Ducat. In order to facilitate the payment of the loans, 1488,
loaned by PHILSEC and Ayala to ATHONA, $300k paid by promissory note (PN)]. PN Inc., through its president, Daic, assumed Ducats obligation under an
became due and demandable and ATHONA failed to pay, thus 1488 sued ATHONA, Agreement, whereby 1488, Inc. executed a Warranty Deed with Vendors
PHILSEC and Ayala in the US. While the civil case was pending in the US, PHILSEC, Lien by which it sold to ATHONA a parcel of land in Texas for US$2.8M,
Ayala (now BPI-IFL) and ATHONA filed a complaint for sum of money with damages while PHILSEC and AYALA extended a loan to ATHONA in the amount of
and writ of preliminary attachment before the RTC of Makati, alleging that private US$2.5M as initial payment of the purchase price. The balance of US$300k
respondents committed fraud by selling the property at a price 400 times more than its was to be paid by means of a promissory note (PN) executed by ATHONA
true value ($800k), thus demanding the excess payment ($1.7M). On April 20, 1987, the in favor of 1488, Inc. Subsequently, upon their receipt of the US$2.5M from
trial court issued a writ of preliminary attachment against the real and personal properties 1488, Inc., PHILSEC and AYALA released Ducat from his indebtedness and
of private respondents. However, upon motion by the latter, it dismissed the case on the delivered to 1488, Inc. all the shares of stock in their possession belonging to
ground of litis pendentia and forum non conveniens, and also held that it was without Ducat. (1488 assumed Ducat’s liability)
jurisdiction over 1488 and Daic because they were non-residents and the action was not 7. As ATHONA failed to pay the interest on the balance of the PN, the entire
an action in rem or quasi in rem, so that extraterritorial service of summons was amount covered by the note became due and demandable. Accordingly, 1488,
ineffective. CA affirmed the ruling. Hence, this case. Inc. sued PHILSEC, AYALA, and ATHONA in the US for payment of
the balance and for damages for breach of contract and for fraud
The issue (topic in syllabus) is whether or not the case is barred by litis pendentia allegedly by misrepresenting the marketability of the shares of stock
through the judgment of the U.S. court. delivered to 1488, Inc. under the Agreement. (Civil Case No. H-86-440)
8. While Civil Case No. H-86-440 was pending in the US, PHILSEC, AYALA
NO. It cannot be said that petitioners were given the opportunity to challenge (now BPI-IFL) and ATHONA filed a complaint for Sum of Money with
the judgment of the U.S. court as basis for declaring it res judicata or conclusive Damages and Writ of Preliminary Attachment against private
of the rights of private respondents. The proceedings in the trial court were respondents in the RTC of Makati, docketed as Civil Case No. 16563. The
complaint alleged that respondents committed fraud by selling the property
summary. Neither the trial court nor the appellate court was even furnished
at a price 400% more than its true value of only US$800k. They claimed that,
copies of the pleadings in the U.S. court or apprised of the evidence presented as a result of the respondents’ fraudulent misrepresentations, ATHONA,
thereat, to assure a proper determination of whether the issues then being PHILSEC, and AYALA were induced to enter into the Agreement and to
litigated in the U.S. court were exactly the issues raised in this case such that purchase the Houston property. They prayed that respondents be ordered to
the judgment that might be rendered would constitute res judicata. return to ATHONA the excess payment of US$1.7M and to pay damages. On
April 20, 1987, the trial court issued a writ of preliminary attachment against
DOCTRINES: While the Court has given the effect of res judicata to foreign judgments the real and personal properties of private respondents.
9. Ducat moved to dismiss Civil Case No. 16563 on the grounds of (1) litis
in several cases, it was after the parties opposed to the judgment had been given ample
pendentia, vis-a-vis Civil Action No. H-86-440 pending in the US, (2) forum
opportunity to repel them on grounds allowed under the law. It is not necessary for this non conveniens, and (3) failure of petitioners PHILSEC and BPI-IFL to state
 a cause of action. On the other hand, 1488, Inc. and its president Daic filed a against the shares of stocks of 1488, Inc. and Daic.
joint Special Appearance and Qualified Motion to Dismiss (MTD),
contending that the action being in personam, extraterritorial service of CA’s RULING:
summons by publication was ineffectual. 5. The CA affirmed the dismissal of Civil Case No. 16563 against Ducat, 1488,
10. *Note: While the case was pending in the Court of Appeals, the US Court Inc., and Daic on the ground of litis pendentia.
rendered judgment in favor of private respondents. 6. CA also held that Civil Case No. 16563 was an action in personam for the
recovery of a sum of money for alleged tortious acts, so that service of
Ducat’s ARGUMENT: summons by publication did not vest the trial court with jurisdiction over
2. The alleged overpricing of the property prejudiced only ATHONA, as buyer, 1488, Inc. and Drago Daic.
but not PHILSEC and BPI-IFL which were not parties to the sale and whose 7. The dismissal of Civil Case No. 16563 on the ground of forum non
only participation was to extend financial accommodation to ATHONA conveniens was likewise affirmed by the Court of Appeals on the ground that
under a separate loan agreement. the case can be better tried and decided by the U.S. court:

1488(through Daic)’s ARGUMENTS: ISSUES:

3. The service of summons did not vest the court with jurisdiction over 1488, 17. Whether Civil Case No. 16536 is barred by litis pendentia through the
Inc., which is a non-resident foreign corporation, and Daic, who is a non- judgment of the U.S. court. – NO, Before the SC could bar the case, there
resident alien. must be an opportunity to challenge the foreign decision on grounds
4. For a foreign judgment to be pleaded as res judicata, a judgment admitting allowed under the law.
the foreign decision is not necessary. 18. Did the lower court correctly dismiss the case under the principle of forum
non conveniens? NO, Trial court’s dismissal is unjustifiable under the
PHILSEC, AYALA & ATHONA’s ARGUMENT: principle of forum non conveniens
2. Foreign judgment cannot be given the effect of res judicata without giving 19. Did the trial court obtain jurisdiction over the person of 1488 and Daic
them an opportunity to impeach it on grounds stated in Rule 39, Sec. 50 (now through extraterritorial service? Yes, See Rule 14 Section 15
48) of the Rules of Court93, to wit: want of jurisdiction, want of notice to the
party, collusion, fraud, or clear mistake of law or fact RULING: WHEREFORE, the decision of the Court of Appeals is REVERSED and
Civil Case No. 16563 is REMANDED to the Regional Trial Court of Makati for
RTC’s RULING: consolidation with Civil Case No. 92-1070 and for further proceedings in accordance
5. The trial court granted Ducat’s MTD, stating that the evidentiary with this decision.
requirements of the controversy may be more suitably tried before the forum
in the US, under the principle forum non conveniens, even as it noted that RATIO:
First Issue
Ducat was not a party in the US case.
6. While the Court has given the effect of res judicata to foreign judgments in
6. The trial court also granted the MTD filed by 1488, Inc. on the ground of litis several cases, it was after the parties opposed to the judgment had been given
pendentia. ample opportunity to repel them on grounds allowed under the law. It is not
7. The trial court also held itself without jurisdiction over 1488, Inc. and Daic necessary for this purpose to initiate a separate action or proceeding for
because they were non-residents and the action was not an action in rem enforcement of the foreign judgment. What is essential is that there is
or quasi in rem, so that extraterritorial service of summons was ineffective. opportunity to challenge the foreign judgment, in order for the court to
8. The trial court subsequently lifted the writ of attachment it had earlier issued properly determine its efficacy. This is because in this jurisdiction, with

93
Rule 39, SEC. 50. Effect of foreign judgments. - The effect of a judgment of a tribunal of judgment may be repelled by evidence of a want of jurisdiction, want of notice to the party,
a foreign country, having jurisdiction to pronounce the judgment is as follows: collusion, fraud, or clear mistake of law or fact.
(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title to ***Note that this case was decided before the effectivity of 1997 Rules of CivPro, hence the
the thing; slight difference. This is now Section 48.
(b) In case of a judgment against a person, the judgment is presumptive evidence of a right
as between the parties and their successors in interest by a subsequent title; but the
 respect to actions in personam, as distinguished from actions in rem, a properly considered a matter of defense.
foreign judgment merely constitutes prima facie evidence of the justness 5. Second, while it is within the discretion of the trial court to abstain from
of the claim of a party and, as such, is subject to proof to the contrary. assuming jurisdiction on this ground, it should do so only after vital facts are
7. In the case at bar, it cannot be said that petitioners were given the established, to determine whether special circumstances require the courts
opportunity to challenge the judgment of the U.S. court as basis for desistance.
declaring it res judicata or conclusive of the rights of private 6. In this case, the trial court abstained from taking jurisdiction solely on the
respondents. The proceedings in the trial court were summary. Neither basis of the pleadings filed by private respondents in connection with the
the trial court nor the appellate court was even furnished copies of the motion to dismiss. It failed to consider that PHILSEC is a domestic
pleadings in the U.S. court or apprised of the evidence presented thereat, to corporation and Ducat is a Filipino, and that it was the extinguishment of the
assure a proper determination of whether the issues then being litigated in the latter’s debt which was the object of the transaction under litigation. The trial
U.S. court were exactly the issues raised in this case such that the judgment court arbitrarily dismissed the case even after finding that Ducat was not a
that might be rendered would constitute res judicata. party in the U.S. case.
8. Petitioners in fact questioned the jurisdiction of the U.S. court over their Third Issue
persons, but their claim was brushed aside by both the trial court and the 1. This is an action in personam and summons was served by extraterritorial
Court of Appeals. service. Rule 14, Sec. 1794 on extraterritorial service provides that service of
9. Moreover, the Court notes that 1488, Inc. and Daic filed a petition for the summons on a non-resident defendant may be effected out of the Philippines
enforcement of judgment in the RTC of Makati, docketed as Civil Case No. by leave of Court where, among others, the property of the defendant has
92-1070, although the proceedings were suspended because of the pendency been attached within the Philippines. It is not disputed that the properties, real
of this case. To sustain the appellate court’s ruling that the foreign and personal, of the private respondents had been attached prior to service of
judgment constitutes res judicata and is a bar to the claim of petitioners summons under the Order of the trial court dated April 20, 1987
would effectively preclude petitioners from repelling the judgment in the
case for enforcement. An absurdity could then arise: a foreign judgment
is not subject to challenge by the plaintiff against whom it is invoked, if
it is pleaded to resist a claim as in this case, but it may be opposed by the
defendant if the foreign judgment is sought to be enforced against him
in a separate proceeding.
10. Accordingly, to insure the orderly administration of justice, this case and
Civil Case No. 92-1070 should be consolidated. After all, the two have been
filed in the RTC of Makati, albeit in different salas. In such proceedings,
petitioners should have the burden of impeaching the foreign judgment and
only in the event they succeed in doing so may they proceed with their action
against private respondents.
Second Issue
4. First, a motion to dismiss is limited to the grounds under Rule 16, Sec. 1,
which does not include forum non conveniens. The propriety of dismissing a
case based on this principle requires a factual determination; hence, it is more

94
Rule 14, SEC. 17. Extraterritorial service. - When the defendant does not reside and is not found court may order, in which case a copy of the summons and order of the court shall be sent by
in the Philippines and the action affects the personal status of the plaintiff or relates to, or the registered mail to the last known address of the defendant, or in any other manner the court may
subject of which is, property within the Philippines, in which the defendant has or claims a lien or deem sufficient. Any order granting such leave shall specify a reasonable time, which shall not
interest, actual or contingent, or in which the relief demanded consists, wholly or in part, in be less than sixty (60) days after notice, within which the defendant must answer.
excluding the defendant from any interest therein, or the property of the defendant from any **Now Section 15
interest therein, or the property of the defendant has been attached within the Philippines, service
may, by leave of court, be effected out of the Philippines by personal service as under section 7;
or by publication in a newspaper of general circulation in such places and for such time as the
012 PHILIPPINE ALUMINUM WHEELS vs. FASGI ENTERPRISES binding in the country from which it comes, until a contrary showing, on the basis
(LAGUILLES) of a presumption of regularity of proceedings and the giving of due notice in the
October 12, 2000 | Vitug, J. | Foreign Judgment foreign forum. Rule 39, Sec. 48 provides that in case of a judgment or final order
against a person, the judgment or final order is presumptive evidence of a right as
PETITIONER: Philippine Aluminum Wheels, Inc. between the parties and their successors-in-interest by a subsequent title. A
RESPONDENTS: FASGI Enterprises, Inc. judgment for a sum of money rendered in a foreign court is presumptive evidence
of a right between the parties and their successors-in-interest by subsequent title,
SUMMARY: FASGI, a US corporation, entered into a distributorship but when suit for its enforcement is brought in a Philippine court, such judgment
arrangement with PAWI, a Philippine corporation, and FPS, an Italian may be repelled by evidence of want of jurisdiction, want of notice to the party,
corporation. The agreement provided for the purchase, importation, and collusion, fraud or clear mistake of law or fact.
distributorship in the US of aluminum wheels manufactured by PAWI. PAWI
then shipped a total of 8,594 wheels, and FASGI paid the FOB value. However, In this case, PAWI claims that its counsel, Mr. Read, was without authority. In
FASBI found the shipment defective and in non-compliance with the stated this jurisdiction, it is clear that an attorney cannot, without a client’s authorization,
requirements (not stamped with country of origin, wheels did not have load limits, settle the action or subject matter of the litigation even when he honestly believes
wheels did not fit automobile for which they were designed). With this, FASGI that such a settlement will best serve his client’s interest. The supplemental
instituted an action against PAWI and FPS for breach of contract. However, agreement was signed by the parties. The agreement was lodged in the California
during the pendency of the case, the parties entered into a settlement where they court two days after the pre-trial conference. If PAWI’s counsel was indeed not
agreed that FPS and PAWI would accept the return of not less than 8,100 wheels authorized by PAWI to enter into the supplemental agreement, PAWI could have
after returning to FASGI the purchase price. However, PAWI still failed to forthwith signified to FASGI a disclaimer of the settlement. Fraud, to hinder the
comply due to the alleged currency regulation and restrictions imposed by the PH enforcement within this jurisdiction of a foreign judgment, must be extrinsic
government. Again, the parties entered into another settlement, where it was (fraud based on facts not controverted or resolved in the case where judgment is
provided that FASGI would deliver to PAWI the wheels for every letter of credit rendered, or that which would go to the jurisdiction of the court or would deprive
opened and paid by PAWI. It was also provided there that FASGI is allowed to the party against whom judgment is rendered a chance to defend the action to
apply to the court of California for entry of judgment in full and that FASGI has which he has a meritorious case or defense.In fine, intrinsic fraud, which goes to
the right to enforce the judgment against PAWI in the US and in any other country the very existence of the cause of action, such as fraud in obtaining the consent
where assets of FPS and PAWI may be located. Again, PAWI was not able to to a contract, is deemed already adjudged, and it therefore, cannot militate against
comply with its obligations, which prompted FASGI to file wth the US District the recognition or enforcement of the foreign judgment. PAWI cannot, by this
Court of California a judgment against PAWI. petition for review, seek refuge over a business dealing and decision gone awry.
Neither do the courts function to relieve a party from the effects of an unwise or
FASGI then filed a notice of entry of judgment. A certificate of finality of unfavorable contract freely entered into.
judgment by the US District Judge of the District Court of California. Unable to
obtain satisfaction of the final judgment within the US, FASGI filed a complaint DOCTRINE: A foreign judgment is presumed to be valid and binding in the
for “enforcement of foreign judgment” before the RTC of Makati. The Makati country from which it comes, until a contrary showing, on the basis of a
court, however, in an order, dismissed the case denying the enforcement of the presumption of regularity of proceedings and the giving of due notice in the
foreign judgment within the Philippine jurisdiction on the ground that the decree foreign forum.
was tainted with collusion, fraud, and clear mistake of law and fact. On appeal to
the CA, the latter reversed the lower court and ordered the full enforcement of the FACTS:
California judgment. Hence this appeal. 9. FASGI, a corporation organized and existing under and by virtue of the laws
of the State of California, USA, entered into a distributorship arrangement
The issue is WoN the California judgment could be enforced in the Philippines. with Philippine Aluminum Wheels, Incorporated (PAWI), a Philippine
The Court held in the affirmative. Generally, in the absence of a special compact, corporation, and Fratelli Pedrini Sarezzo (FPS), an Italian corporation.
no sovereign is bound to give effect within its dominion to a judgment rendered 10. The agreement provided for the purchase, importation, and distributorship in
by a tribunal of another country. A foreign judgment is presumed to be valid and the US of aluminum wheels manufactured by PAWI.
11. Pursuant to the contract, PAWI shipped to FASGI a total of 8,594 wheels, prompting FASGI to pursue its complaint for damages before the California
with an FOB value of US$216,444.30 at the time of the shipment, the first District Court.
batch arriving in two containers and the second in three containers. 20. In the interim, the parties, realizing the protracted process of litigation,
12. FASGI paid PAWI the FOB value, but FASGI found the shipment to be resolved to enter into another arrangement, this time entitled “Supplemental
defective and in non-compliance with stated requirements: Settlement Agreement.” In substance, the covenant provided that FASGI
a. The country of origin was not stamped on the wheels (in violation would deliver to PAWI a container of wheels for every LC opened and paid
of US laws) by PAWI.
b. Wheels did not have weight load limits as required 21. The Supplemental Agreement also provided that upon the execution of the
c. Many of the wheels did not have an indication as to which models agreement, the obligations of FASGI to store or maintain the Containers and
they would fit Wheels shall be limited to storing the Wheels and Containers in their present
d. Many of the wheels did not fit the model automobiles for which they warehouse location and maintaining FASGI’s current insurance in favor of
were designed FASGI, insuring against usual commercial risks for such storage.
e. Some of the wheels did not fit any model automobile in use in the 22. The deal allowed FASGI to enter before the California court the foregoing
US stipulations in the event of the failure of PAWI to make good the scheduled
f. Most boxes in which the wheels were packed indicated that the payments:
wheels were approved by the Specialty Equipment Manufacturer’s a. The parties have executed and delivered a Mutual Release and a Stipulation
Association (SEMA), when in fact no SEMA approval has been for Judgment with respect to the Action
obtained b. In the event of breach of the Supplemental Agreement, FASGI shall have
13. FASGI then instituted an action against PAWI and FPS for breach of contract the right to apply to the Court for entry of Judgment in the full amount
thereof
and recovery of damages in the amount of US$2,316,591 before the US
c. FASGI shall have the right to enforce the judgment against PAWI and FPS
District Court for the Central District of California. in the US and in any other country where assets of FPS or PAWI may be
14. However, during the pendency of the case, the parties entered into a located.
settlement, entitled “Transaction” with the corresponding Italian translation, d. PAWI and FPS hereby waive all defenses in any such country
“Convenzione Transsativa,” where it was stipulated that FPS and PAWI e. FPS and PAWI consent to the jurisdiction of the Italian and Philippine
would accept the return of not less than 8,100 wheels after restoring to FASGI courts in any action brought by FASGI to seek a judgment in those countries
the purchase price of US$268,750 via four irrevocable letters of credit (LC). 23. PAWI, again, proved to be remiss in its obligation under the supplemental
15. In a telex message, PAWI president Rojas expressed the company’s inability settlement agreement. While it opened the first LC in June 1980, it, however,
to comply with the foregoing agreement and proposed a revised schedule of only paid on it 9 months after, or in March 1981, when the LC by then were
payment. supposed to have all been already posted.
16. PAWI said that they could not comply because of the currency regulations 24. This lapse notwithstanding, FASGI promptly shipped to PAWI the first
and restrictions imposed by the PH government on the outflow of foreign container of wheels. Again, despite the delay on the second LC, FASGI
currency in the country. PAWI also offered to defray the extra storage charges readily delivered the second container. Later, PATI totally defaulted in
resulting from the new schedule, and should FASGI be unable to renew the opening and paying the third and fourth LCs.
lease of the present warehouse, PAWI would shoulder storage charges 25. FASGI counsel was more inclined to believe that PAWI’s failure to pay was
transfer. due not to any restriction by the CB or any other cause than its inability to
17. Again, through a telex message, PAWI informed FASGI that it was pay. These doubts were based on the telex message of PAWI of the bank’s
impossible to open a LC on or before April 1980 but assured that it would do approval of PAWI’s request to open LCs to cover payment for the
its best to comply with the suggested schedule of payments. reimportation of wheels.
18. FASGI insisted that PAWI should meet the terms of the proposed schedule 26. Irked by PAWI’s persistent default, FASGI filed with the US District Court
of payments, specifically its undertaking to open the first LC within April of California a judgment against PAWI. The motion is made on the grounds
1980, and that if the LC is not opened by then, it would immediately take all that PAWI has breached its obligations.
necessary legal action to protect its position. 27. FASGI then filed a notice of entry of judgment. A certificate of finality of
19. Despite its assurances and FASGI’s insistence, PAWI failed to open the first judgment by the US District Judge of the District Court of California.
LC in April 1980 allegedly due to Central Bank “inquiries and restrictions,” 28. Unable to obtain satisfaction of the final judgment within the US, FASGI
 filed a complaint for “enforcement of foreign judgment” before the RTC of brought in a Philippine court, such judgment may be repelled by
Makati. The Makati court, however, in an order, dismissed the case denying evidence of want of jurisdiction, want of notice to the party, collusion,
the enforcement of the foreign judgment within the Philippine jurisdiction, fraud or clear mistake of law or fact.
on the ground that the decree was tainted with collusion, fraud, and clear 12. PAWI claims that its counsel has acted without its authority. Verily, in this
mistake of law and fact. jurisdiction, it is clear that an attorney cannot, without a client’s
29. The lower court ruled that the foreign judgment ignored the reciprocal authorization, settle the action or subject matter of the litigation even when
obligations of the parties. While the assailed foreign judgment ordered PAWI he honestly believes that such a settlement will best serve his client’s interest.
to return the purchase amount, no similar order was made requiring FASGI 13. In this case, the supplemental agreement was signed by the parties. The
to return to PAWI the wheels. This situation, according to the lower court, agreement was lodged in the California court two days after the pre-trial
amounted to an unjust enrichment on the part of FASGI. conference. If PAWI’s counsel was indeed not authorized by PAWI to enter
30. FASGI appealed the decision to the CA, which the latter reversed and ordered into the supplemental agreement, PAWI could have forthwith signified to
the full enforcement of the California judgment. FASGI a disclaimer of the settlement.
14. Instead, more than a year after the execution of the supplemental agreement,
ISSUE/s: PAWI sent a communication to FASGI that failed to mention PAWI’s
25. WoN the California judgment could be enforced here in the Philippines – counsel’s supposed lack of authority.
YES because a judgment for a sum of money rendered in foreign court is 15. It is an accepted rule that when a client, upon becoming aware of the
presumptive evidence of a right between the parties and their successors-in- compromise and the judgment thereon, fails to promptly repudiate the action
interest by subsequent title. of his attorney, he will not afterwards be heard to complain about it.
16. PAWI could also not claim any prejudice by the settlement. PAWI was
RULING: Wherefore, the decision of the Court of Appeals is AFFIRMED. spared from possibly paying FASGI substantial amounts of damages and
incurring heavy litigation expenses normally generated in a full-blown trial.
RATIO: PAWI was afforded time to reimburse FASGI the price it had paid for the
7. Generally, in the absence of a special compact, no sovereign is bound to give defective wheels. So, PAWI should not be allowed to later disown the
effect within its dominion to a judgment rendered by a tribunal of another arrangement when the terms thereof ultimately would prove to operate
country; however, the rules of comity, utility, and convenience of nations against its hopeful expectations.
have established a usage by which final judgments of foreign courts of 17. PAWI assailed not only their counsel’s authority to sign on its behalf the
competent jurisdiction are reciprocally respected and rendered supplemental agreement, but denounced likewise his authority to enter into a
efficacious under certain conditions that may vary in different countries. stipulation for judgment before the California court on the ground that it had
8. In this jurisdiction, a valid judgment rendered by a foreign tribunal may be by then already terminated the former’s services.
recognized insofar as the immediate parties and the underlying cause of 18. If PAWI were indeed hoodwinked by their counsel who purportedly acted in
action are concerned so long as it is convincingly shown that there has been collusion with FASGI, it should have aptly raised the issue before the court.
an opportunity for a full and fair hearing before a court of competent 19. Fraud, to hinder the enforcement within this jurisdiction of a foreign
jurisdiction. judgment, must be extrinsic (fraud based on facts not controverted or resolved
9. A foreign judgment is presumed to be valid and binding in the country in the case where judgment is rendered, or that which would go to the
from which it comes, until a contrary showing, on the basis of a jurisdiction of the court or would deprive the party against whom judgment
presumption of regularity of proceedings and the giving of due notice in is rendered a chance to defend the action to which he has a meritorious case
the foreign forum. or defense.
10. Rule 39, Sec. 48 provides that in case of a judgment or final order against 20. In fine, intrinsic fraud, which goes to the very existence of the cause of action,
a person, the judgment or final order is presumptive evidence of a right such as fraud in obtaining the consent to a contract, is deemed already
as between the parties and their successors-in-interest by a subsequent adjudged, and it therefore, cannot militate against the recognition or
title. enforcement of the foreign judgment.
11. A judgment for a sum of money rendered in a foreign court is 21. PAWI cannot, by this petition for review, seek refuge over a business dealing
presumptive evidence of a right between the parties and their successors- and decision gone awry. Neither do the courts function to relieve a party from
in-interest by subsequent title, but when suit for its enforcement is the effects of an unwise or unfavorable contract freely entered into.
 013 MIJARES v. RANADA (Marcos)
April 12, 2005 | Tinga, J. | Recognition and Enforcement of Foreign Judgments (b) In case of a judgment against a person, the judgment is presumptive evidence
of a right as between the parties and their successors in interest by a
PETITIONER: PRISCILLA C. MIJARES, LORETTA ANN P. ROSALES, subsequent title;
HILDA B. NARCISCO, SR. MARIANI DIMARANAN, SFIC, and JOEL C.
LAMANGAN, in their behalf and on behalf of the Class Plaintiffs in Class In either case, the judgment or final order may be repelled by evidence of a want
Action No. MDL 840, United States District Court of Hawaii, of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of
law or fact.
RESPONDENTS: HON. SANTIAGO JAVIER RANADA, in his capacity as
Presiding Judge of Branch 137, Regional Trial Court, Makati City, and the FACTS:
ESTATE OF FERDINAND E. MARCOS, through its court appointed legal 1. A complaint was filed with the United States District Court (US District
representatives in Class Action MDL 840, United States District Court of Court), District of Hawaii, against the Estate of former Philippine President
Hawaii, namely: Imelda R. Marcos and Ferdinand Marcos, Jr. Ferdinand E. Marcos (Marcos Estate).
2. The action was brought forth by ten Filipino citizens who each alleged having
SUMMARY: A complaint was filed with the US District Court, District of suffered human rights abuses such as arbitrary detention, torture and rape in
Hawaii against the Marcos estate. The action was brought forth by ten Filipino the hands of police or military forces during the Marcos regime.
citizens who each alleged having suffered human rights abuses such as arbitrary 3. The Alien Tort Act was invoked as basis for the US District Court's
detention, torture and rape in the hands of police or military forces during the jurisdiction over the complaint, as it involved a suit by aliens for tortious
Marcos regime. The Alien Tort Act was invoked as basis for jurisdiction. Trial violations of international law.
ensued and the US District Court rendered a Final Judgment awarding them a 4. These plaintiffs brought the action on their own behalf and on behalf of a
total of $1,964,005,859.90. This was eventually affirmed by the US Court of class of similarly situated individuals, particularly consisting of all current
Appeals. The present petitioners (Mijares et. al.) filed Complaint with the Makati civilian citizens of the Philippines, their heirs and beneficiaries, who between
RTC for the enforcement of the Final Judgment. The Marcos Estate filed a motion 1972 and 1987 were tortured, summarily executed or had disappeared while
to dismiss, raising, among others, the non-payment of the correct filing fees. in the custody of military or paramilitary groups.
Respondent Judge Santiago Javier Ranada of the Makati RTC issued the subject 5. Plaintiffs alleged that the class consisted of approximately ten thousand
Order dismissing the complaint without prejudice. The issue is WoN Judge (10,000) members; hence, joinder of all these persons was impracticable.
Ranada erred in dismissing the case for failure to pay the proper fees. – YES 6. The institution of a class action suit was warranted under Rule 23(a) and
because although the complaint to enforce the US District Court judgment is one (b)(1) (B) of the US Federal Rules of Civil Procedure, the provisions of which
capable of pecuniary estimation, it is also an action based on judgment against an were invoked by them (Mijares et. al.)
estate, thus placing it beyond the ambit of Section 7(a) of Rule 141. The 7. Then, on 3 February 1995, the US District Court, presided by Judge Manuel
procedural rule is that will apply is outlined in Section 48, Rule 39 of the Rules L. Real, rendered a Final Judgment awarding the plaintiff class a total of
of Civil Procedure. The Court also discussed that the recognition of foreign $1,964,005,859.90.
judgments has attained the status of opinio juris in international practice. This is 8. The Final Judgment was eventually affirmed by the US Court of Appeals for
a significant proposition, as it acknowledges that the procedure and requisites the Ninth Circuit, in a decision rendered on 17 December 1996.
outlined in Section 48, Rule 39 derive their efficacy not merely from the 9. On 20 May 1997, the present petitioners (Mijares et. al.) filed Complaint with
procedural rule, but by virtue of the incorporation clause of the Constitution. the Makati RTC for the enforcement of the Final Judgment.
10. They alleged that they are members of the plaintiff class in whose favor the
DOCTRINE: SEC. 48. Effect of foreign judgments. — The effect of a judgment US District Court awarded damages. They argued that since the Marcos
of a tribunal of a foreign country, having jurisdiction to pronounce the judgment Estate failed to file a petition for certiorari with the US Supreme Court after
is as follows: the Ninth Circuit Court of Appeals had affirmed the Final Judgment, the
decision of the US District Court had become final and executory, and
(a) In case of a judgment upon a specific thing, the judgment is conclusive upon hence should be recognized and enforced in the Philippines, pursuant to
the title to the thing; Section 50, Rule 39 of the Rules of Court then in force.
 11. The Marcos Estate filed a motion to dismiss, raising, among others, the non- 4. Mijares et. al.'s complaint may have been lodged against an estate, but it is
payment of the correct filing fees. clearly based on a judgment, the Final Judgment of the US District Court.
12. It alleged that petitioners had only paid Four Hundred Ten Pesos (P410.00) The provision does not make any distinction between a local judgment
as docket and ling fees, notwithstanding the fact that they sought to enforce and a foreign judgment, and where the law does not distinguish, we shall
a monetary amount of damages in the amount of over Two and a Quarter not distinguish.
Billion US Dollars (US$2.25 Billion). 5. Thus, respondent judge was in clear and serious error when he concluded that
13. The Marcos Estate cited Supreme Court Circular No. 7, pertaining to the the filing fees should be computed on the basis of the schematic table of
proper computation and payment of docket fees. Section 7(a), as the action involved pertains to a claim against an estate based
14. In response, the Mijares et. al. claimed that an action for the enforcement of on judgment.
a foreign judgment is not capable of pecuniary estimation; hence, a filing fee 6. What provision, if any, then should apply in determining the filing fees for
of only Four Hundred Ten Pesos (P410.00) was proper, pursuant to Section an action to enforce a foreign judgment?
7(c) of Rule 141. 7. The procedural rule is now outlined in Section 48, Rule 39 of the Rules of
15. Respondent Judge Santiago Javier Ranada of the Makati RTC issued the Civil Procedure.
subject Order dismissing the complaint without prejudice. 8. Section 48 states:
16. Judge Ranada opined that the subject matter of the complaint was indeed
capable of pecuniary estimation, as it involved a judgment rendered by a SEC. 48. Effect of foreign judgments. — The effect of a judgment of a tribunal of a
foreign court ordering the payment of definite sums of money, allowing for foreign country, having jurisdiction to pronounce the judgment is as follows:
easy determination of the value of the foreign judgment.
17. Mijares et. al. filed a Motion for Reconsideration, which Judge Ranada (c) In case of a judgment upon a specific thing, the judgment is conclusive
upon the title to the thing;
denied in an Order dated 28 July 1999. From this denial, petitioners led a
Petition for Certiorari under Rule 65 assailing the twin orders of respondent (d) In case of a judgment against a person, the judgment is presumptive
judge. They prayed for the annulment of the questioned orders, and an order evidence of a right as between the parties and their successors in
directing the reinstatement of Civil Case No. 97-1052 and the conduct of interest by a subsequent title;
appropriate proceedings thereon.
In either case, the judgment or final order may be repelled by evidence of a want of
ISSUE/s: WoN Judge Ranada erred in dismissing the case for failure to pay the proper jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fees. – YES because although the complaint to enforce the US District Court judgment fact.
is one capable of pecuniary estimation, it is also an action based on judgment against
an estate, thus placing it beyond the ambit of Section 7(a) of Rule 141.
9. There is an evident distinction between a foreign judgment in an action in
RULING: WHEREFORE, the petition is GRANTED. The assailed orders are rem and one in personam.
NULLIFIED and SET ASIDE, and a new order REINSTATING Civil Case No. 97- 10. For an action in rem, the foreign judgment is deemed conclusive upon the
1052 is hereby issued. No costs. title to the thing, while in an action in personam, the foreign judgment is
presumptive, and not conclusive, of a right as between the parties and their
RATIO: successors in interest by a subsequent title.
1. In dismissing the complaint, the respondent judge relied on Section 7(a), Rule 11. However, in both cases, the foreign judgment is susceptible to impeachment
141 as basis for the computation of the ling fee of over P472 Million. in our local courts on the grounds of want of jurisdiction or notice to the party,
2. The provision covers, on one hand, ordinary actions, permissive collusion, fraud, or clear mistake of law or fact.
counterclaims, third-party, etc. complaints and complaints-in-interventions, 12. Thus, the party aggrieved by the foreign judgment is entitled to defend
and on the other, money claims against estates which are not based on against the enforcement of such decision in the local forum.
judgment. 13. It is essential that there should be an opportunity to challenge the foreign
3. Thus, the relevant question for purposes of the present petition is whether the judgment, in order for the court in this jurisdiction to properly determine its
action filed with the lower court is a "money claim against an estate not based efficacy.
on judgment." 14. It is clear then that it is usually necessary for an action to be filed in order to
 enforce a foreign judgment, even if such judgment has conclusive effect as in it was an action incapable of pecuniary estimation corresponds to the same
the case of in rem actions, if only for the purpose of allowing the losing party amount required for "other actions not involving property." Mijares et.al. thus
an opportunity to challenge the foreign judgment, and in order for the court paid the correct amount of filing fees, and it was a grave abuse of discretion
to properly determine its efficacy. for respondent judge to have applied instead a clearly inapplicable rule and
15. Consequently, the party attacking a foreign judgment has the burden of dismissed the complaint.
overcoming the presumption of its validity. (Biglang nag discuss yung SC about recognition and enforcement of foreign
16. The rules are silent as to what initiatory procedure must be undertaken in judgments)
order to enforce a foreign judgment in the Philippines. But there is no 27. There have been attempts to codify through treaties or multilateral
question that the filing of a civil complaint is an appropriate measure for such agreements the standards for the recognition and enforcement of foreign
purpose. judgments, but these have not borne fruition.
17. A civil action is one by which a party sues another for the enforcement or 28. Yet even if there is no unanimity as to the applicable theory behind the
protection of a right, and clearly an action to enforce a foreign judgment is in recognition and enforcement of foreign judgments or a universal treaty
essence a vindication of a right prescinding either from a "conclusive rendering it obligatory force, there is consensus that the viability of such
judgment upon title" or the "presumptive evidence of a right." recognition and enforcement is essential.
18. As stated in Section 48, Rule 39, the actionable issues are generally restricted 29. There is also consensus as to the requisites for recognition of a foreign
to a review of jurisdiction of the foreign court, the service of personal judgment and the defenses against the enforcement thereof.
notice, collusion, fraud, or mistake of fact or law. 30. As earlier discussed, the exceptions enumerated in Section 48, Rule 39 have
19. The limitations on review is in consonance with a strong and pervasive policy remain unchanged since the time they were adapted in this jurisdiction from
in all legal systems to limit repetitive litigation on claims and issues. long standing American rules. The requisites and exceptions as delineated
20. Otherwise known as the policy of preclusion, it seeks to protect party under Section 48 are but a restatement of generally accepted principles of
expectations resulting from previous litigation, to safeguard against the international law.
harassment of defendants, to insure that the task of courts not be increased by 31. The viability of the public policy defense against the enforcement of a foreign
never-ending litigation of the same disputes, and to promote “rest and judgment has been recognized in this jurisdiction.
quietness”. 32. This defense allows for the application of local standards in reviewing the
21. If every judgment of a foreign court were reviewable on the merits, the foreign judgment, especially when such judgment creates only a presumptive
plaintiff would be forced back on his/her original cause of action, rendering right, as it does in cases wherein the judgment is against a person.
immaterial the previously concluded litigation 33. The defense is also recognized within the international sphere, as many civil
22. Ultimately it is self-evident that while the subject matter of the action is law nations adhere to a broad public policy exception which may result in a
undoubtedly the enforcement of a foreign judgment, the effect of a denial of recognition when the foreign court, in the light of the choice-of-law
providential award would be the adjudication of a sum of money. rules of the recognizing court, applied the wrong law to the case.
23. Perhaps in theory, such an action is primarily for "the enforcement of the 34. The public policy defense can safeguard against possible abuses to the easy
foreign judgment," but there is a certain obtuseness to that sort of argument resort to offshore litigation if it can be demonstrated that the original claim is
since there is no denying that the enforcement of the foreign judgment will noxious to our constitutional values.
necessarily result in the award of a definite sum of money. 35. There is no obligatory rule derived from treaties or conventions that requires
24. Thus, we are comfortable in asserting the obvious, that the complaint to the Philippines to recognize foreign judgments, or allow a procedure for the
enforce the US District Court judgment is one capable of pecuniary enforcement thereof. However, generally accepted principles of international
estimation. But at the same time, it is also an action based on judgment law, by virtue of the incorporation clause of the Constitution, form part of the
against an estate, thus placing it beyond the ambit of Section 7(a) of Rule laws of the land even if they do not derive from treaty obligations.
141. 36. While the definite conceptual parameters of the recognition and enforcement
25. What provision then governs the proper computation of the filing fees over of foreign judgments have not been authoritatively established, the Court can
the instant complaint? For this case and other similarly situated instances, we assert with certainty that such an undertaking is among those generally
find that it is covered by Section 7(b)(3), involving as it does, "other actions accepted principles of international law.
not involving property." 37. As earlier demonstrated, there is a widespread practice among states
26. Notably, the amount paid as docket fees by the petitioners on the premise that accepting in principle the need for such recognition and enforcement, albeit
 subject to limitations of varying degrees. The fact that there is no binding
universal treaty governing the practice is not indicative of a widespread
rejection of the principle, but only a disagreement as to the imposable specific
rules governing the procedure for recognition and enforcement.
38. Aside from the widespread practice, it is indubitable that the procedure for
recognition and enforcement is embodied in the rules of law, whether
statutory or jurisprudential, adopted in various foreign jurisdictions. In the
Philippines, this is evidenced primarily by Section 48, Rule 39 of the Rules
of Court which has existed in its current form since the early 1900s.
39. Certainly, the Philippine legal system has long ago accepted into its
jurisprudence and procedural rules the viability of an action for enforcement
of foreign judgment, as well as the requisites for such valid enforcement, as
derived from internationally accepted doctrines.
40. Again, there may be distinctions as to the rules adopted by each particular
state, but they all prescind from the premise that there is a rule of law obliging
states to allow for, however generally, the recognition and enforcement of a
foreign judgment.
41. The bare principle, to our mind, has attained the status of opinio juris in
international practice.
42. This is a significant proposition, as it acknowledges that the procedure and
requisites outlined in Section 48, Rule 39 derive their efficacy not merely
from the procedural rule, but by virtue of the incorporation clause of the
Constitution.
43. Rules of procedure are promulgated by the Supreme Court, and could very
well be abrogated or revised by the high court itself. Yet the Supreme Court
is obliged, as are all State components, to obey the laws of the land, including
generally accepted principles of international law which form part thereof,
such as those ensuring the qualified recognition and enforcement of foreign
judgments.
44. Thus, relative to the enforcement of foreign judgments in the Philippines, it
emerges that there is a general right recognized within our body of laws, and
affirmed by the Constitution, to seek recognition and enforcement of foreign
judgments, as well as a right to defend against such enforcement on the
grounds of want of jurisdiction, want of notice to the party, collusion, fraud,
or clear mistake of law or fact.
45. It bears noting that Section 48, Rule 39 acknowledges that the Final Judgment
is not conclusive yet, but presumptive evidence of a right of the petitioners
against the Marcos Estate. Moreover, the Marcos Estate is not precluded to
present evidence, if any, of want of jurisdiction, want of notice to the party,
collusion, fraud, or clear mistake of law or fact.
 014 ASIAVEST v CA (ARMAND) exercise of its jurisdiction. Hence, once the authenticity of the foreign judgment is
July 20, 2001 | De Leon, J. | Enforcement of Foreign Court Judgment proved, the party attacking a foreign judgment, is tasked with the burden of
overcoming its presumptive validity.
PETITIONER: ASIAVEST MERCHANT BANKERS
RESPONDENTS: COURT OF APPEALS and PNCC
SUMMARY: Asiavest filed a complaint against the defendant Antonio Heras FACTS:
praying that said defendant be ordered to pay to the plaintiff the amounts awarded by 1. Petitioner Asiavest Merchant Bankers (M) Berhad is a corporation organized
the Hong Kong Court Judgment. The action filed in Hong Kong against Heras was in under the laws of Malaysia while Philippine National Construction
personam, since it was based on his personal guarantee of the obligation of the Corporation is a corporation duly incorporated and existing under Philippine
principal debtor. The trial court concluded that the Hong Kong court judgment should laws.
be recognized and given effect in this jurisdiction for failure of Heras to overcome the 2. Asiavest initiated a suit for collection against PNCC, then known as
legal presumption in favor of the foreign judgment. Asiavest moved for the Construction and Development Corporation of the Philippines, before the
reconsideration of the decision. It sought an award of judicial costs and an increase in High Court of Malaya in Kuala Lumpur entitled “Asiavest Merchant Bankers
attorney's fees with interest until full payment of the said obligations. On the other (M) Berhad v. Asiavest CDCP Sdn. Bhd. and Construction and Development
hand, Heras no longer opposed the motion and instead appealed the decision to CA. Corporation of the Philippines.”
The CA agreed with Heras that notice sent outside the state to a non-resident is 3. Asiavest sought to recover the indemnity of the performance bond it had put
unavailing to give jurisdiction in an action against him personally for money up in favor of PNCC to guarantee the completion of the Felda Project and the
recovery. Summons should have been personally served on Heras in Hong Kong. The nonpayment of the loan it extended to Asiavest-CDCP Sdn. Bhd. for the
issues are: completion of Paloh Hanai and Kuantan By Pass; Project.
WoN the judgment of the Hong Kong Court has been repelled by evidence of want of 4. The High Court of Malaya (Commercial Division) rendered judgment in
jurisdiction due to improper notice to the party – YES. Asiavest cannot now claim favor of the Asiavest and against the PNCC. Following unsuccessful attempts
that Heras was a resident of Hong Kong at the time since the stipulated fact that to secure payment from PNCC under the judgment, Asiavest initiated the
Heras "is a resident of New Manila, Quezon City, Philippines" refers to his complaint before RTC of Pasig, Metro Manila, to enforce the judgment of the
residence at the time jurisdiction over his person was being sought by the Hong High Court of Malaya.
Kong court. Accordingly, since Heras was not a resident of Hong Kong and the 5. PNCC sought the dismissal of the case via a Motion to Dismiss, contending
action against him was, in personam, summons should have been personally that the alleged judgment of the High Court of Malaya should be denied
served on him in Hong Kong. recognition or enforcement since on in face, it is tainted with want of
WoN the CA erred in denying recognition and enforcement to the Malaysian Court jurisdiction, want of notice to PNCC, collusion and/or fraud, and there is a
judgment – YES. Asiavest sufficiently established the existence of the money clear mistake of law or fact. Dismissal was, however, denied by the trial court
judgment of the High Court of Malaya by the evidence it offered and having considering that the grounds relied upon are not the proper grounds in a
thus proven, through the foregoing evidence, the existence and authenticity of motion to dismiss under Rule 16 of the Revised Rules of Court.
the foreign judgment, said foreign judgment enjoys presumptive validity and the 6. Subsequently, PNCC filed its Answer with Compulsory Counter claim’s and
burden then fell upon the party who disputes its validity, herein PNCC, to prove therein raised the grounds it brought up in its motion to dismiss. In its Reply
otherwise. filed, the Asiavest contended that the High Court of Malaya acquired
DOCTRINE: Under Section 50(b), Rule 39 of the Revised Rules of Court, which jurisdiction over the person of PNCC by its voluntary submission the court’s
was the governing law at the time the instant case was decided by the trial court and jurisdiction through its appointed counsel. Furthermore, PNCC’s counsel
respondent appellate court, a judgment, against a person, of a tribunal of a foreign waived any and all objections to the High Court’s jurisdiction in a pleading
country having jurisdiction to pronounce the same is presumptive evidence of a right filed before the court.
as between the parties and their successors in interest by a subsequent title. The 7. In due time, the trial court rendered its decision dismissing Asiavest’s
judgment may, however, be assailed by evidence of want of jurisdiction, want of complaint. Asiavest interposed an appeal with the Court of Appeals, but the
notice to the party, collusion, fraud, or clear mistake of law or fact. In addition, under appellate court dismissed the same and affirmed the decision of the trial court.
Section 3(n), Rule 131 of the Revised Rules of Court, a court, whether in the
Philippines or elsewhere, enjoys the presumption that it was acting in the lawful ISSUE:
 1. WoN the judgment of the Hong Kong Court has been repelled by evidence 4. Generally, in the absence of a special compact, no sovereign is bound to give
of want of jurisdiction due to improper notice to the party – YES. Asiavest effect within its dominion to a judgment rendered by a tribunal of another
cannot now claim that Heras was a resident of Hong Kong at the time country; however, the rules of comity, utility and convenience of nations have
since the stipulated fact that Heras "is a resident of New Manila, Quezon established a usage among civilized states by which final judgments of
City, Philippines" refers to his residence at the time jurisdiction over his foreign courts of competent jurisdiction are reciprocally respected and
person was being sought by the Hong Kong court. Accordingly, since rendered efficacious under certain conditions that may vary in different
Heras was not a resident of Hong Kong and the action against him was, countries.
in personam, summons should have been personally served on him in 5. In this jurisdiction, a valid judgment rendered by a foreign tribunal may be
Hong Kong. recognized insofar as the immediate parties and the underlying cause of
2. WoN the CA erred in denying recognition and enforcement to the Malaysian action are concerned so long as it is convincingly shown that there has been
Court judgment – YES. Asiavest sufficiently established the existence of an opportunity for a full and fair hearing before a court of competent
the money judgment of the High Court of Malaya by the evidence it jurisdiction; that the trial upon regular proceedings has been conducted,
offered and having thus proven, through the foregoing evidence, the following due citation or voluntary appearance of the defendant and under a
existence and authenticity of the foreign judgment, said foreign system of jurisprudence likely to secure an impartial administration of justice;
judgment enjoys presumptive validity and the burden then fell upon the and that there is nothing to indicate either a prejudice in court and in the
party who disputes its validity, herein PNCC, to prove otherwise. system of laws under which it is sitting or fraud in procuring the judgment.
6. A foreign judgment is presumed to be valid and binding in the country from
RULING: WHEREFORE, the instant petition is GRANTED. The Decision of the which it comes, until a contrary showing, on the basis of a presumption of
Court of Appeals denying the enforcement of the Judgment dated September 13, regularity of proceedings and the giving of due notice in the foreign forum
1985 of the High Court of Malaya in Kuala Lumpur is REVERSED and SET Under Section 50(b), Rule 39 of the Revised Rules of Court, which was the
ASIDE, and another in its stead is hereby rendered ORDERING private respondent governing law at the time the instant case was decided by the trial court and
Philippine National Construction Corporation to pay Asiavest Merchant Bankers (M) respondent appellate court, a judgment, against a person, of a tribunal of a
Berhad the amounts adjudged in the said foreign Judgment, subject of the said case. foreign country having jurisdiction to pronounce the same is presumptive
evidence of a right as between the parties and their successors in interest by
RATIO: a subsequent title.
1. Anent the first issue, Asiavest cannot now claim that Heras was a resident of 7. The judgment may, however, be assailed by evidence of want of jurisdiction,
Hong Kong at the time since the stipulated fact that Heras "is a resident of want of notice to the party, collusion, fraud, or clear mistake of law or fact.
New Manila, Quezon City, Philippines" refers to his residence at the time 8. In addition, under Section 3(n), Rule 131 of the Revised Rules of Court, a
jurisdiction over his person was being sought by the Hong Kong court. court, whether in the Philippines or elsewhere, enjoys the presumption that it
Accordingly, since Heras was not a resident of Hong Kong and the action was acting in the lawful exercise of its jurisdiction.
against him was, in personam, summons should have been personally served 9. Hence, once the authenticity of the foreign judgment is proved, the party
on him in Hong Kong. attacking a foreign judgment, is tasked with the burden of overcoming its
2. The extraterritorial service in the Philippines was therefore invalid and did presumptive validity.
not confer on the Hong Kong court jurisdiction over his person. It follows 10. In the instant case, Asiavest sufficiently established the existence of the
that the Hong Kong court judgment cannot be given force and effect here in money judgment of the High Court of Malaya by the documentary and
the Philippines for having been rendered without jurisdiction. testimonial evidence it offered.
3. On the same note, Heras was also an absentee, hence, he should have been 11. Asiavest’s sole witness, testified to the effect that he is in active practice of
served with summons in the same manner as a non-resident not found in Hong the law profession in Malaysia; that he was connected with Skrine and
Kong. Section 17, Rule 14 of the Rules of Court providing for extraterritorial Company as Legal Assistant up to 1981; that PNCC, then known as
service will not apply because the suit against him was in personam. Neither Construction and Development Corporation of the Philippines, was sued by
can we apply Section 18, which allows extraterritorial service on a resident his client, Asiavest Merchant Bankers (M) Berhad, in Kuala Lumpur; that the
defendant who is temporarily absent from the country, because even if Heras writ of summons were served on March 17, 1983 at the registered office of
be considered as a resident of Hong Kong, the undisputed fact remains that PNCC and on March 21, 1983 on Cora S. Deala, a financial planning officer
he left Hong Kong not only temporarily but for good. of PNCC for Southeast Asia operations; that upon the filing of the case,
 Messrs. Allen and Gledhill, Advocates and Solicitors, with address at 24th
Floor, UMBC Building, Jalan Sulaiman, Kuala Lumpur, entered their
conditional appearance for PNCC questioning the regularity of the service of
the writ of summons but subsequently withdrew the same when it realized
that the writ was properly served; that because PNCC failed to file a statement
of defense within two (2) weeks, Asiavest filed an application for summary
judgment and submitted affidavits and documentary evidence in support of
its claim; that the matter was then heard before the High Court of Kuala
Lumpur in a series of dates where PNCC was represented by counsel; and
that the end result of all these proceedings is the judgment sought to be
enforced.
12. In addition to the said testimonial evidence, Asiavest also offered the
documentary evidence to support their claim.
13. Having thus proven, through the foregoing evidence, the existence and
authenticity of the foreign judgment, said foreign judgment enjoys
presumptive validity and the burden then fell upon the party who disputes its
validity, herein PNCC, to prove otherwise. However, PNCC failed to
sufficiently discharge the burden that fell upon it – to prove by clear and
convincing evidence the grounds which it relied upon to prevent enforcement
of the Malaysian High Court judgment.
 015 REPUBLIC v. GINGOYON (MERILLES) Procurement and Construction Contract they had with PIATCO.
February 1, 2006 | Tinga, J. | Expropriation 4. On account of these adverse claims, the Government now claims as
controvertible the question of who is the builder of the NAIA 3.
5. The Government likewise claims as "indispensable" the need of Takenaka
PETITIONER: Republic of the Philippines and Asahikosan to provide the necessary technical services and supplies so
RESPONDENTS: Hon. Henrick Gingoyon that all the various systems and equipment will be ready and operational in a
manner that allows the Government to possess a fully-capable international
SUMMARY: This case revolves around the NAIA Terminal III project. In the
airport terminal.
year 2005 the Court rendered a decision ordering the Government to pay PIATCO
6. The Government’s concerns that impelled the filing of its Motion for
the preferred value of the NAIA project before a writ of possession may be
Reconsideration are summed up in the following passage therein:
granted to it. The present case is a Motion for Partial Reconsideration.
a. "The situation the Republic now faces is that if any part of its
Php3,002,125,000 deposit is released directly to PIATCO, and
The Government argues that PIATCO has pending obligations to third parties,
PIATCO, as in the past, does not wish to settle its obligations
and the Republic may end up having expropriated a terminal with liens and claims
directly to Takenaka, Asahikosan and Fraport, the Republic may end
far in excess of its actual value, the liens remain unextinguished, and PIATCO on up having expropriated a terminal with liens and claims far in excess
the other hand, ends up with the Php3,0002,125,000 in its pockets gratuitously. of its actual value, the liens remain unextinguished, and PIATCO on
the other hand, ends up with the Php3,0002,125,000 in its pockets
The SC held that it cannot be made to overturn its order on ground of factual gratuitously."
premises that are not yet conclusive or judicially established. While the
Government refers to a judgment rendered by a London court in favor of
ISSUE/s:
Takenaka and Asahikosan against PIATCO in the amount of US$82 Million, it
1. WON the Court should overturn its 2005 ruling on ground of pending
should be noted that this foreign judgment is not yet binding on Philippine courts.
obligations of PIATCO - No. The Court is not one to reverse its previous
rulings based on factual premises that are not yet conclusive or judicially
DOCTRINE: It is entrenched in Section 48, Rule 39 of the Rules of Civil
established.
Procedure that a foreign judgment on the mere strength of its promulgation is not
yet conclusive, as it can be annulled on the grounds of want of jurisdiction, want RULING: WHEREFORE, the Motion for Partial Reconsideration of the petitioners
of notice to the party, collusion, fraud, or clear mistake of law or fact. It is likewise is DENIED WITH FINALITY.
recognized in Philippine jurisprudence and international law that a foreign RATIO:
judgment may be barred from recognition if it runs counter to public policy. 1. The Court is not one to reverse its previous rulings based on factual premises
that are not yet conclusive or judicially established.
a. Certainly, whatever claims or purported liens Takenaka and
FACTS: Asahikosan against PIATCO or over the NAIA 3 have not been
1. This case is a Motion for Partial Reconsideration initiatied by the judicially established.
Government concerning the SC’s December 2005 resolution. b. Neither Takenaka nor Asahikosan are parties to the present action,
2. This Resolution will instead focus as it should on the new arguments, as well and thus have not presented any claim which could be acted upon
as the perspectives that were glossed over in the Decision. by this Court.
3. On the newly raised arguments, there are considerable factual elements 2. It must be emphasized that the conclusive ruling in the Resolution dated 21
brought up by the Government. In the main, the Government devotes January 2004 in Agan v. PIATCO (Agan 2004) is that PIATCO, as builder of
significant effort in diminishing PIATCO’s right to just compensation as the facilities, must first be justly compensated in accordance with law and
builder or owner of the NAIA 3. equity for the Government to take over the facilities.
a. Particularly brought to fore are the claims relating to two entities, a. It is on that premise that the Court adjudicated this case in its 19
Takenaka Corporation (Takenaka) and Asahikosan (Asahikosan) December 2005 Decision.
Corporation, who allegedly claim "significant liens" on the terminal, 3. While the Government refers to a judgment rendered by a London court in
arising from their alleged unpaid bills by virtue of an Engineering, favor of Takenaka and Asahikosan against PIATCO in the amount of US$82
 Million, it should be noted that this foreign judgment is not yet binding on to acquisition of possession by the State of the property is
Philippine courts. a proprietary right, appropriately classified as a
a. It is entrenched in Section 48, Rule 39 of the Rules of Civil substantive matter and, thus, within the sole province of
Procedure that a foreign judgment on the mere strength of its the legislature to legislate on.
promulgation is not yet conclusive, as it can be annulled on the c. As to motions for international of Takenaka and Asahikosan:
grounds of want of jurisdiction, want of notice to the party, i. The requisite legal interest required of a party-in-
collusion, fraud, or clear mistake of law or fact. intervention has not been established so as to warrant the
b. It is likewise recognized in Philippine jurisprudence and extra-ordinary step of allowing intervention at this late
international law that a foreign judgment may be barred from stage.
recognition if it runs counter to public policy. ii. As earlier noted, the claims of Takenaka and Asahikosan
4. Assuming that PIATCO indeed has corresponding obligations to other parties have not been judicially proved or conclusively
relating to NAIA 3, the Court does not see how such obligations, yet established as fact by any trier of facts in this jurisdiction.
unproven, could serve to overturn the Decision mandating that the Certainly, they could not be considered as indispensable
Government first pay PIATCO the amount of 3.02 Million Pesos before it parties to the petition for certiorari.
may acquire physical possession over the facilities. iii. There is no compelling reason to disregard the established
5. This directive enjoining payment is in accordance with Republic Act No. rules and permit the interventions belatedly filed after the
8974, and under the mechanism established by the law the amount to be promulgation of the Court’s Decision.
initially paid is that which is provisionally determined as just compensation.
6. As to other grounds raised by the Government:
a. The Government argues that the 2004 Resolution in Agan did not
strictly require the payment of just compensation before the
Government can take over the airport facilities. Reliance is placed
on the use by the Court of the word "for", instead of "before."
i. Yet the clear intent of that ruling is to mandate payment of
just compensation as a condition precedent before the
Government could acquire physical possession over the
airport facilities.
ii. The qualification was made out of due consideration of the
fact that PIATCO had already constructed the facilities at
its own expense when its contracts with the Government
were nullified.
b. The Government likewise adopts the position raised by the
Dissenting Opinion of Mr. Justice Corona that Rep. Act No. 8974
could not repeal Rule 67 of the Rules of Court, since the deposit of
the assessed value is a procedural matter. It adds that otherwise, Rep.
Act No. 8974 is unconstitutional.
i. Of course it is too late in the day to question the
constitutionality of Rep. Act No. 8974, an issue that was
not raised in the petition.
ii. Still, this point was already addressed in the Decision,
which noted that the determination of the appropriate
standards for just compensation is a substantive matter
well within the province of the legislature to fix.
iii. The right of the owner to receive just compensation prior
 016 GONZALES v. CLIMAX MINING (PELIÑO) it to arbitration. Climax-Arimco, on the other hand argues, in essence, that the
January 22, 2007 | Tinga, J. | Arbitration Clause arbitration clause is separable from the contract itself. The SC held that implicit
in the nature of the judicial proceedings is the separable or independent character
G.R. No. 161957 of the arbitration clause or agreement. The doctrine of separability, or
PETITIONERS: Jorge Gonzales and Panel of Arbitrators severability as other writers call it, enunciates that an arbitration agreement is
RESPONDENTS: Climax Mining Ltd., Climax-Arimco Mining Corp., and independent of the main contract. The arbitration agreement is to be treated as a
Australasian Philippines Mining Inc. (APMI) separate agreement and the arbitration agreement does not automatically
terminate when the contract of which it is part comes to an end. The separability
G.R. No. 167994 of the arbitration agreement is especially significant to the determination of
PETITIONER: Jorge Gonzales whether the invalidity of the main contract also nullifies the arbitration clause.
RESPONDENTS: Hon. Oscar B. Pimentel, in his capacity as Presiding Judge of Indeed, the doctrine denotes that the invalidity of the main contract, also referred
Br. 148 of the RTC of Makati City, and Climax-Arimco Mining Corporation to as the "container" contract, does not affect the validity of the arbitration
agreement. Irrespective of the fact that the main contract is invalid, the
SUMMARY: Climax-Arimco sent a demand for arbitration pursuant to Clause arbitration clause/agreement still remains valid and enforceable. The separability
19.1 of the Addendum Contract and also in accordance with Sec. 5 of RA 876. of the arbitration clause is confirmed in Art. 16(1) of the UNICTRAL Model
Climax filed a motion to set the application to compel arbitration for hearing. Law of Art. 21(2) of the UNCITRAL Arbitration Rules.
Gonzales filed a MTD but failed to set hearing, so he filed an Answer with
Counterclaim, alleging that the arbitration clause is void in view of Climax- DOCTRINE: Implicit in the nature of the judicial proceedings is the separable or
Arimco’s acts of fraud, oppression, and violation of the Constitution. Thus, independent character of the arbitration clause or agreement. Irrespective of the
Clause 19.1 is also null and void and void ab initio. RTC issued an order fact that the main contract is invalid, the arbitration clause/agreement still remains
declaring his MTD moot and academic in view of the Answer. Gonzales asked valid and enforceable.
the RTC to set the case for pre-trial, but the RTC denied holding that the petition **Included both the decision and the resolution so we could all have a grasp of what
for arbitration is a special proceeding, summary in nature. But the RTC happened and in the event that ma’am asks what happened in the decision.**
eventually granted the MR and set the case for pre-trial. Climax-Arimco filed a FACTS:
motion to resolve its pending motion to compel arbitration, but the RTC denied. 2005 DECISION
Climax-Arimco filed a Motion to inhibit the judge, which the judge granted, so (I included this only to provide a background of what happened in the case because
the case was raffled to the sala of Judge Pimentel. Climax-Arimco filed a MR for the 2007 Resolution doesn’t really have much facts; you can skip this part, but I’ll
the denial of its motion to resolve the pending motion to compel arbitration, italicize the relevant parts which would be related to the Arbitration topic)
which Judge Pimentel granted and directed the parties to arbitration. Judge 13. Gonzales was a claimowner of mineral deposits in the Addendum Area of
Pimentel issued an order requiring Gonzales to proceed with arbitration Influence in Dipidio, in the provinces of Quirino and Nueva Vizcaya, entered
proceedings and appointing retired CA Justice Coquia as sole arbitrator. into a co-production, joint venture and/or production-sharing letter-
Gonzales moved for reconsideration, but was denied. Hence, this case. The issue agreement designated as the May 14, 1987 Letter of Intent with
in this case is whether or not it was proper for the RTC, in the proceeding to Geophilippines, Inc., and Inmex Ltd.
compel arbitration under RA 876, to order the parties to arbitrate even though a. Under that agreement, Gonzales granted to Geophilippines and Inmex
Gonzales raised the twin issues of validity and nullity of the Addendum the exclusive right to explore and survey the mining claims for a period
Contract, and consequently, of the arbitration clause as well. The SC upheld the of 36 months, within which Geophilippines and Inmex could decide to
decision of the RTC. In essence, the argument of Gonzales is that since he raised take an operating agreement on the mining claims and/or develop,
the issues of validity and nullity of the Addendum Contract (which contains the operate, mine and otherwise exploit the mining claims and market any
Arbitration Clause or Clause 19.1), then it was error for the RTC to have and all minerals that may be derived therefrom.
required them to proceed with arbitration because Both RA 876 and RA 9285 14. On 9 March 1991, Gonzales, Arimco, Geophilippines, Inmex, and Aumex
mandate that any issue as to the nullity, inoperativeness, or incapability of signed a document as the Addendum to the May 14, 1987 Letter of Intent and
performance of the arbitration clause/agreement raised by 1 of the parties to the February 28, 1989 Agreement with Express Adhesion Thereto (hereinafter,
alleged arbitration agreement must be determined by the court prior to referring Addendum Contract).
 a. Under the Addendum Contract, Arimco would apply to the PH a. The Panel maintained that there was a mining dispute between the parties
government for permission to mine the claims as the government’s since the subject matter of the Complaint arose from contracts between
contractor under a Financial and Technical Assistance Agreement parties which involve the exploration and exploitation of minerals over
(FTAA). the disputed area.
b. On 20 June 1994, Climax-Arimco obtained the FTAA and carried work 19. Climax, Climax-Arimco, and APMI assailed the Panel’s orders via a petition
under it. for certiorari with the CA.
15. Climax, Climax-Arimco, and APMI executed the Operating and Financial a. On 30 July 2003, the CA granted the petition, declaring that the Panel
Accomodation Contract (b/w Climax-Arimco and Climax as the 1st parties, did not have jurisdiction over the complaint filed by Gonzales.
and APMI as the 2nd party) dated 23 December 1996 and Assignment, b. CA said that the jurisdiction of the Panel is limited only to the resolution
Accession Agreement (b/w Climax and APMI) dated 3 December 1996. of mining disputes, defined as those which raise a question of fact or
a. Climax and APMI entered into a Memorandum of Agreement dated 1 matter requiring the technical knowledge and experience of mining
June 1991 whereby Climax transferred its FTAA to APMI. authorities.
16. On 8 November 1999, Gonzales filed before the Panel of Arbitrators (Panel), c. It was found that the complaint alleged fraud, oppression, and violation
Region II, Mines and Geosciences Bureau of the DENR, against Climax- of the Constitution, which called for the interpretation and application of
Arimco, Climax, and APMI, a Complaint, seeing the declaration of nullity or laws, and did not involve any mining dispute.
termination of the Addendum Contract, FTAA, Operating and Financial d. CA also observed that there were no abverments relating to particular
Accomodation Contract, the Assignment, Accession Agreement, and the acts constituting fraud and oppression.
Memorandum Agreement. e. It added that since the Addendum Contract was executed in 1991, the
a. Gonzales prayed for an unspecified amount of actual and exemplary action to annul should have been brought not later than 1995, as the
damages + atty’s fees and for the issuance of a TRO and/or writ of prescriptive period to annul is 4 yrs from the time of discovery of fraud.
preliminary injunction to restrain or enjoin Climax, Climax-Arimco, and f. When Gonzales filed his complaint before the Panel in 1999, his action
APMI from further implementing the abovementioned agremeents. already prescribed. Also the CA noted that fraud and duress only make a
b. Gonzales sought the reliefs on the grounds of: Fraud, Oppression, and/or contract voidable, not inexistent, hence the contract remains valid until
Violation of Sec. 2, Art. XII of the Constitution perpetrated by these annulled.
foreign companies, conspiring and confederating with one another and g. The CA was of the opinion that the petition should have been settled
with each other. through arbitration under RA 876 (Arbitration Law) as stated in Clause
17. On 25 February 2001, the Panel of Arbitrators dismissed the Complaint for 19.1 of the Addendum contract.
lack of merit. h. CA declared the Panel’s orders dated 18 October 2001 and 25 June 2002
a. Gonzales moved for reconsideration, and was granted on 18 October as invalid.
2001, the Panel believing that the case involved a dispute involving i. On 28 January 2004, the CA denied Gonzales’ MR for lack of merit.
rights to mining areas and a dispute involving surface owners, occupants 20. Gonzales filed on 22 March 2004 a Petition for Review on Certiorari under
and claim owners/concesionaires. Rule 45, assailing the CA’s decision and resolution.
b. According to the Panel, although the issue raised in the Complaint
appeared to be purely civil in nature and should be within the jurisdiction ISSUE/s with RATIO: PETITION DENIED
of the regular courts, a ruling on the validity of the assailed contracts 1. (not relevant) WON there was forum shopping on the part of Climax, Climax-
would result to the grant or denial of mining rights over the properties; Arimco, and APMI for their failure to disclose to the SC their filing of a
therefore, the question on the validity of the contract amounts to a mining petition to compel for arbitration before the RTC of Makati, Br. 148, which
conflict or dispute. is currently pending.
c. Hence, the panel granted the MR with regard to the issues of nullity, a. Gonzales: Climax, Climax-Arimco, and APMI are guilty of forum-
termination, withdrawal or damages, but with regard to the shopping for failing to disclose to the CA that they filed a Petition to
constitutionality of the Addendum Agreement and FTAA, it held it had Compel for Abitration in the RTC of Makati.
no jurisdiction. b. SC: It can’t be determined from the mere allegations in the petition that
18. Climax, Climax-Arimco, and APMI filed a MR but this was denied on 25 the petition to compel for arbitration instituted by Climax-Arimco
June 2002. involves related causes of action and the grant of the same or
 substantially the same reliefs as those involved in the case here. Gonzales such contract or agreement on the ground of fraud or oppression as in
didn’t attach copies of the Peititon to Compel for Arbitration or any order this case. The validity of the contract cannot be subject of arbitration
or resolution of the RTC related to that case. Moreover, it can be gleaned proceedings. Allegations of fraud and duress in the execution of a
from the nature of the 2 actions that the issues in the case before the RTC contract are matters within the jurisdiction of the ordinary courts of law.
and in the CA are different. A petition for certiorari raises issue of WON These questions are legal in nature and require the application and
there was GADALEJ, while petition to compel for arbitration seeks the interpretation of laws and jurisprudence which is necessarily a judicial
implementation of the arbitration clause in the agreement between the function.
parties. b. Gonzales: disagrees with the CA’s ruling that the case should be brought
2. (not relevant) WON the counsel for Climax had the authority to file the for arbitration under RA 876, pursuant to the arbitration clause in the
petition for certiorari before the CA considering that the signor of the petition Addendum Contract which states that "all disputes arising out of or in
for certiorari’s verification and CNFS was not authorized to sign the same in connection with the Contract, which cannot be settled amicably among
behalf of Climax. the Parties, shall finally be settled under RA 876." He points out that
a. Gonzales: There was no authority granted by Climax to Sycip to file the Climax and APMI are not parties to the Addendum Contract and are thus
petition before the CA, since there was no Secretary’s Certificate not bound by the arbitration clause in said contract.
attached to the petition. The V&CNFS only contains a statement made c. SC agrees that the case should not be brought under the ambit of the
by Marianne M. Manzanas that she is “aso the authorized representative Arbitration Law, but for a different reason. The question of validity of
of Climax” without presenting further proof of her authority. Hence, the the contract containing the agreement to submit to arbitration will affect
filing of the petition before the CA is an unauthorized act and the assailed the applicability of the arbitration clause itself. A party cannot rely on
orders of the Panel have become final. the contract and claim rights or obligations under it and at the same time
b. SC: Agrees with Gonzales that there appears to be no subsequent impugn its existence or validity. Indeed, litigants are enjoined from
compliance with the requirement to attach a board resolution authorizing taking inconsistent positions. As previously discussed, the complaint
the signor Manzanas to file the petition in behalf of Climax. (Sec. 3, Rule should have been filed before the regular courts as it involved issues
46 of the ROC) Climax failed to refute this in its Comment. However, which are judicial in nature.
the SC said that this issue becomes irrelevant in the light of the decision
to deny this petition for review for lack of jurisdiction by the Panel over 2007 RESOLUTION
the complaint of Gonzales. (This is the case referred to in the syllabus)
3. (related) WON the complaint filed by Gonzales raises a mining dispute over 1. This is a consolidation of 2 petitions rooted in the same disputed Addendum
which the Panel has jurisdiction, or a judicial question which should properly Contract entered into by the parties.
be brought before the regular courts. a. In G.R. No. 161957, the Court, in its Decision of February 28, 2005,
a. SC: The Panel is bereft of jurisdiction over the complaint. This is because denied the Rule 45 petition of Jorge Gonzales (Gonzales). It held that the
the complaint is not about a dispute involving rights to mining areas, nor DENR Panel of Arbitrators (Panel) had no jurisdiction over the
is it a dispute involving claimholders or concessionaires, but the main complaint for the annulment of the Addendum Contract on grounds of
question was about the validity of the contracts. Also, the complaint also fraud and violation of the Constitution and that the action should have
raised the issue of constitutionality, thus such question is within the been brought before the regular courts as it involved judicial issues.
exclusive jurisdiction of the court. The Panel does not have jurisdiction b. Both parties filed separate MRs. Gonzales avers in his MR that the Court
over such an issue since it does not involve the application of technical erred in holding that the Panel was bereft of jurisdiction, reiterating its
knowledge and expertise relating to mining. argument that the case involves a mining dispute that properly falls
4. (main) WON the dispute between the parties should be brought for within the ambit of the Panel’s authority. Gonzales also adds that the
arbitration under RA 876. Court failed to rule on other issues he raised relating to the sufficiency
a. Arbitration before the Panel is proper only when there is a disagreement of his complaint before the Panel and the timeliness of its filing.
between the parties as to some provisions of the contract between them, 2. Climax filed their Motion for Partial Reconsideration and/or Classification
which needs the interpretation and the application of that particular seeking reconsideration of that part of the Decision holding that the case
knowledge and expertise possessed by members of that Panel. It is not should not be brought for arbitration under RA 876, also known as the
proper when one of the parties repudiates the existence or validity of Arbitration Law.
 a.Climax, citing American jurisprudence and the UNCITRAL Model Law, a. On 23 March 2000, Climax-Arimco had sent Gonzales a Demand for
argue that the arbitration clause in the Addendum Contract should be Arbitration pursuant to Clause 19.1 of the Addendum Contract and also
treated as an agreement independent of the other terms of the contract, in accordance with Sec. 5 of RA 876.95
and that a claimed rescission of the main contract does not avoid the duty b. The petition for arbitration was subsequently filed and Climax-Arimco
to arbitrate. sought an order to compel the parties to arbitrate pursuant to the
b. They add that Gonzales’ argument relating to the alleged invalidity of arbitration clause. It was raffled to Br. 132 of RTC of Makati, with Judge
the Addendum Contract still has to be proven and adjudicated on in a Herminio I. Benito as the presiding judge. Climax-Arimco filed on 5
proper proceeding; that is, an action separate from the motion to compel April 2000 a motion to set the application to compel arbitration for
arbitration. Pending judgment in such separate action, the Addendum hearing.
Contract remains valid and binding and so does the arbitration clause 2. On 14 April 2000, Gonzales filed a MTD which he failed to set for hearing.
therein. a. On 15 May 2000, he filed an Answer with Counterclaim, questioning the
c. Climax adds that the holding in the Decision that "the case should not be validity of the Addendum Contract containing the arbitration clause.
brought under the ambit of the Arbitration Law" appears to be premised b. He alleged that the Addendum Contract containing the arbitration clause
on Gonzales’ having "impugned the existence or validity" of the is void in view of Climax-Arimco’s acts of fraud, oppression, and
addendum contract. If so, it supposedly conveys the idea that Gonzales’ violation of the Constitution. Thus, the arbitration clause, Clause 19.1,
unilateral repudiation of the contract or mere allegation of its invalidity contained in the Addendum Contract is also null and void ab initio and
is all it takes to avoid arbitration. legally inexistent.
3. Hence, Climax submits that the court's holding that "the case should not be 3. On 18 May 2000, RTC issued an order declaring Gonzales’ MTD moot and
brought under the ambit of the Arbitration Law" be understood or clarified as academic in view of the Answer with Counterclaim.
operative only where the challenge to the arbitration agreement has been 4. On 31 May 2000, Gonzales asked the RTC to set the case for pre-trial.
sustained by final judgment. a. RTC denied on 16 June 2000, holding that the petition for arbitration is
4. Both parties were required to file their respective comments to the other a special proceeding that is summary in nature.
party's motion for reconsideration/clarification. b. However, on 7 July 2000, the RTC granted Gonzales’ MR and set the
a. Climax filed their Comment on 17 August 2005, while Gonzales filed case for pre-trial on 10 August 2000, it being the view that Gonzales has
his only on 25 July 2006. raised in his answer the issue of the making of the arbitration agreement.
5. On the other hand, G.R. No. 167994 is a Rule 65 petition filed on 6 May 5. Climax-Arimco filed a motion to resolve its pending motion to compel
2005, or while the MRs in G.R. No. 161957 were pending, wherein Gonzales arbitration.
challenged the orders of the RTC requiring him to proceed with the a. RTC denied in its 24 July 2000 order.
arbitration proceedings as sought by Climax-Arimco. 6. On 28 July 2000, Climax-Arimco filed a Motion to Inhibit the judge for “not
G.R. No. 167994 possessing the cold neutrality of an impartialy judge”.
1. Stemmed from the Petition to Compel Arbitration filed by Climax-Arimco a. On 5 August 2000, the judge issued an order granting the Motion to
before the RTC of Makati on 31 March 2000, while the complaint for the Inhibit and ordered the re-raffling of the petition for arbitration.
nullification of the Addendum Contract was pending before the DENR Panel b. The case was raffled to Judge Oscar B. Pimentel of Br. 148.
of Arbitrators (Panel). 7. On 23 August 2000, Climax-Arimco filed a MR of the 24 July 2000 Order.

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Clause 19.1 of the Addendum Contract: "All disputes arising out of or in connection with the Contract, granted hereunder. If the CLAIMOWNER, ARIMCO and AUMEX fail to agree on an arbitrator within 30
which cannot be settled amicable among the Parties, shall be finally settled under Republic Act No. 876, days from the date they first begin considering persons to act as arbitrator, such arbitrator shall be
otherwise known as 'The Arbitration Law," as may be amended from time to time. It is agreed, however, appointed by the appropriate court in accordance with Republic Act No. 876. The Parties agree that the
that at all events and notwithstanding any provision of Republic Act No. 876, only one arbitrator shall be venue of the arbitration and all actions under the Contract shall be Metro Manila, Philippines. The Parties
appointed by all the Parties. For purposes of such appointment and at all proceedings hereunder, each of further agree that the decision of the arbitrator shall be binding and enforceable upon the Parties and that
the CLAIMOWNER and ARIMCO shall have one vote. AUMEX, GEOPHILIPPINES and INMEX shall no judicial action may be instituted by any Party against any other Party under the Contract except as
jointly have only one vote and, for purposes hereof, GEOPHILIPPINES and INMEX hereby irrevocably provided in this Clause 19.1."
constitute AUMEX as their attorney-in-fact, in their place, name and stead, to exercise the voting right
 a. Climax-Arimco argued that RA 876 does not authorize a pre-trial or trial 1. Gonzales’ arguments: contends that Judge Pimentel acted with GAD in
for a motion to compel arbitration but directs the court to hear the motion immediately ordering the parties to proceed with arbitration despite the
summarily and resolve it within 10 days from hearing. proper, valid, and timely raised argument in his Answer with Counterclaim
b. Judge Pimentel granted the motion and directed the parties to arbitration. that the Addendum Contract, containing the arbitration clause is null and
8. On 13 February 2001, Judge Pimentel issued the first assailed order requiring void.
Gonzales to proceed with arbitration proceedings and appointing retired CA a. Gonzales sought also a TRO to prevent the enforcement of the assailed
Justice Jorge Coquia as sole arbitrator. orders directing the parties to arbitrate, and to direct Judge Pimentel to
a. Gonazles moved for reconsideration on 20 March 2001, but was denied hold a pre-trial conference and the necessary hearings on the
in an order dated 7 March 2005. determination of the nullity of the Addendum Contract.
9. Gonzales thus filed the Rule 65 petition assailing the orders dated 13 b. Gonzales invokes Sec. 6 of RA 87696 and also Sec. 24 of RA 928597 or
February 2001 and 7 March 2005 of Judge Pimentel. the Alternative Dispute Resolution Act of 2004.
10. Hence, this petition. c. According to him, the above-quoted provisions outline the procedure to
be followed in petitions to compel arbitration, which the RTC did not
ISSUE/s: follow. Thus, referral of the parties to arbitration by Judge Pimentel
20. WON it was proper for the RTC, in the proceeding to compel arbitration despite the timely and properly raised issue of nullity of the Addendum
under RA 876, to order the parties to arbitrate even though Gonzales raised Contact was misplaced and without legal basis.
the twin issues of validity and nullity of the Addendum Contract and, d. Both RA 876 and RA 9285 mandate that any issue as to the nullity,
consequently, of the arbitration clause therein as well. – YES, implicit in the inoperativeness, or incapability of performance of the arbitration
nature of the judicial proceedings is the separable or independent character clause/agreement raised by 1 of the parties to the alleged arbitration
of the arbitration clause or agreement. Irrespective of the fact that the main agreement must be determined by the court prior to referring it to
contract is invalid, the arbitration clause/agreement still remains valid and arbitration.
enforceable. e. They require that the trial court first determine or resolve the issue of
nullity, and there is no other venue for this determination other than a
RULING: WHEREFORE, the petition for certiorari in G.R. No. 167994 is pre-trial and hearing on the issue by the trial court which has jurisdiction
DISMISSED. Such dismissal effectively renders superfluous formal action on the over the case.
Motion for Partial Reconsideration and/or Clarification filed by Climax Mining Ltd., f. The assailed 13 February 2001 Order also violated his right to due
et. al. in G.R. No. 161957. process when the trial court erroneously ruled on the existence of the
arbitration agreement despite the absence of a hearing for the
The Motion for Reconsideration filed by Jorge Gonzales in G.R. No. 161957 is presentation of evidence on the nullity of the Addendum Contract.
DENIED WITH FINALITY. 2. Climax-Arimco’s arguments: assails the mode of review availed of by
Gonzales in light of Sec. 29 of RA 876.98
RATIO:
Arguments of the parties

96
Sec. 6. Hearing by court. — A party aggrieved by the failure, neglect or refusal of another to perform The court shall decide all motions, petitions or applications filed under the provisions of this Act, within
under an agreement in writing providing for arbitration may petition the court for an order directing ten days after such motions, petitions, or applications have been heard by it.
97
that such arbitration proceed in the manner provided for in such agreement. Five days notice in writing of Sec. 24. Referral to Arbitration. — A court before which an action is brought in a matter which is the
the hearing of such application shall be served either personally or by registered mail upon the party in subject matter of an arbitration agreement shall, if at least one party so requests not later than the pre-trial
default. The court shall hear the parties, and upon being satisfied that the making of the agreement or conference, or upon the request of both parties thereafter, refer the parties to arbitration unless it finds that
such failure to comply therewith is not in issue, shall make an order directing the parties to proceed to the arbitration agreement is null and void, inoperative or incapable of being performed.
98
arbitration in accordance with the terms of the agreement. If the making of the agreement or default be in Sec. 29. Appeals. — An appeal may be taken from an order made in a proceeding under this Act, or
issue the court shall proceed to summarily hear such issue. If the finding be that no agreement in writing from a judgment entered upon an award through certiorari proceedings, but such appeals shall be limited
providing for arbitration was made, or that there is no default in the proceeding thereunder, the to questions of law. The proceedings upon such an appeal, including the judgment thereon shall be
proceeding shall be dismissed. If the finding be that a written provision for arbitration was made and governed by the Rules of Court in so far as they are applicable.
there is a default in proceeding thereunder, an order shall be made summarily directing the parties to
proceed with the arbitration in accordance with the terms thereof.
 a. Special civil action for certiorari employed by Gonzales is available only transaction to be arbitrated. The statute, in particular paragraph 1 of Sec.
where there is no appeal or any plain, speedy, and adequate remedy in 2 thereof, considers the arbitration stipulation an independent contract in
the ordinary course of law against the challenged orders or acts. its own right whose enforcement may be prevented only on grounds
b. RA 876 provides for an appeal from such orders, which, under the ROC, which legally make the arbitration agreement itself revocable.99
must be filed within 15 days from notice of the final order or resolution h. The grounds Gonzales invokes for the revocation of the Addendum
appealed from or of the denial of the MR filed in due time. Contract — fraud and oppression in the execution thereof — are also not
c. Gonzales has not denied that the relevant 15-day period for an appeal had grounds for the revocation of the arbitration clause in the Contract, Such
elapsed long before he filed this petition for certiorari. He cannot use the grounds may only be raised by way of defense in the arbitration itself
special civil action of certiorari as a remedy for a lost appeal. and cannot be used to frustrate or delay the conduct of arbitration
d. An application to compel arbitration under Sec. 6 of RA 876 confers on proceedings. Instead, these should be raised in a separate action for
the trial court only a limited and special jurisdiction, i.e., a jurisdiction rescission.
solely to determine (a) whether or not the parties have a written contract i. Summary proceeding to compel arbitration under Sec. 6 of RA 876
to arbitrate, and (b) if the defendant has failed to comply with that should not be confused with the procedure in Sec. 24 of RA 9285.
contract. Sec. 6 of RA 876 Sec. 24 of RA 9285
e. La Naval Drug Corporation v. CA, in a proceeding to compel arbitration, Refers to an application to Ordinary action which covers a
"the arbitration law explicitly confines the court's authority only to pass compel arbitration where the matter that appears to be
upon the issue of whether there is or there is no agreement in writing court’s authority is limited to arbitrable or subject to arbitration
providing for arbitration," and "in the affirmative, the statute ordains that resolving the issue of whether under the arbitration agreement.
the court shall issue an order 'summarily directing the parties to proceed there is or there is no agreement
with the arbitration in accordance with the terms thereof.'" in writing providing for
f. Climax-Arimco argues that R.A. No. 876 gives no room for any other arbitration
issue to be dealt with in such a proceeding, and that the court presented j. In the latter case, the statute is clear that the court, instead of trying the
with an application to compel arbitration may order arbitration or dismiss case, may, on request of either or both parties, refer the parties to
the same, depending solely on its finding as to those two limited issues. arbitration, unless it finds that the arbitration agreement is null and void,
If either of these matters is disputed, the court is required to conduct a inoperative or incapable of being performed. Arbitration may even be
summary hearing on it. Gonzales's proposition contradicts both the trial ordered in the same suit brought upon a matter covered by an arbitration
court's limited jurisdiction and the summary nature of the proceeding agreement even without waiting for the outcome of the issue of the
itself. validity of the arbitration agreement. Art. 8 of the UNCITRAL Model
g. Gonzales’ attack on or repudiation of the Addendum Contract also is not Law states that where a court before which an action is brought in a
a ground to deny effect to the arbitration clause in the Contract. The matter which is subject of an arbitration agreement refers the parties to
arbitration agreement is separate and severable from the contract arbitration, the arbitral proceedings may proceed even while the action
evidencing the parties' commercial or economic transaction, it stresses. is pending.
Hence, the alleged defect or failure of the main contract is not a ground
to deny enforcement of the parties' arbitration agreement. Even the party On the issue of availing of the Rule 65 remedy
who has repudiated the main contract is not prevented from enforcing its 3. SC addresses the Rule 65 petition in G.R. No. 167994 from the remedial law
arbitration provision. RA 876 itself treats the arbitration clause or perspective.
agreement as a contract separate from the commercial, economic or other

99
Sec. 2. Persons and matters subject to arbitration. — Two or more persons or parties may submit to the Such submission or contract may include question arising out of valuations, appraisals or other
arbitration of one or more arbitrators any controversy existing, between them at the time of the controversies which may be collateral, incidental, precedent or subsequent to any issue between the
submission and which may be the subject of an action, or the parties to any contract may in such contract parties.
agree to settle by arbitration a controversy thereafter arising between them. Such submission or A controversy cannot be arbitrated where one of the parties to the controversy is an infant, or a person
contract shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the judicially declared to be incompetent, unless the appropriate court having jurisdiction approve a petition
revocation of any contract. for permission to submit such controversy to arbitration made by the general guardian or guardian ad litem
of the infant or of the incompetent.
 a. It deserves to be dismissed on procedural grounds, as it was filed in lieu of the wrong remedy in the broader interests of justice, the petition would
of appeal which is the prescribed remedy and at that far beyond the nevertheless be dismissed for failure of Gonzales to show grave abuse of
reglementary period. discretion.
b. It is elementary in remedial law that the use of an erroneous mode of
appeal is cause for dismissal of the petition for certiorari and it has been On the Arbitration issue
repeatedly stressed that a petition for certiorari is not a substitute for a 4. Arbitration, as an alternative mode of settling disputes, has long been
lost appeal. As its nature, a petition for certiorari lies only where there is recognized and accepted in our jurisdiction. The Civil Code is explicit on the
"no appeal," and "no plain, speedy and adequate remedy in the ordinary matter.
course of law." a. RA 876 also expressly authorizes arbitration of domestic disputes.
c. The Arbitration Law specifically provides for an appeal by certiorari, i.e., Foreign arbitration, as a system of settling commercial disputes of an
a petition for review under certiorari under Rule 45 of the Rules of Court international character, was likewise recognized when the Philippines
that raises pure questions of law. adhered to the United Nations "Convention on the Recognition and the
d. There is no merit to Gonzales’ argument that the use of the permissive Enforcement of Foreign Arbitral Awards of 1958," under the 10 May
term "may" in Sec. 29, RA 876 in the filing of appeals does not prohibit 1965 Resolution No. 71 of the Philippine Senate, giving reciprocal
nor discount the filing of a petition for certiorari under Rule 65. recognition and allowing enforcement of international arbitration
e. Proper interpretation of the aforesaid provision of law shows that the agreements between parties of different nationalities within a contracting
term "may" refers only to the filing of an appeal, not to the mode of state.
review to be employed. Indeed, the use of "may" merely reiterates the b. The enactment of RA. 9285 on 2 April 2004 further institutionalized the
principle that the right to appeal is not part of due process of law but is a use of alternative dispute resolution systems, including arbitration, in the
mere statutory privilege to be exercised only in the manner and in settlement of disputes.
accordance with law. c. Disputes do not go to arbitration unless and until the parties have agreed
f. Gonzales would argue using the BF Corporation v. CA100 case to support to abide by the arbitrator's decision. Necessarily, a contract is required
his theory since in that case, it recognized and allowed a petition for for arbitration to take place and to be binding
certiorari under Rule 65 “appealing the order of the RTC disregarding d. RA 876 recognizes the contractual nature of the arbitration agreement.
the arbitration agreement as an acceptable remedy.” (Refer to the footnote in Ratio #2g; I highlighted the important part that
g. But the situation in BF Corporation is not availing in the present petition. the court mentioned here so I won’t have to cite it again here.)
The disquisition in BF Corporation led to the conclusion that in order e. Manila Electric Co. v. Pasay Transportation Co.: a submission to
that the question of jurisdiction may be resolved, the appellate court had arbitration is a contract. A clause in a contract providing that all matters
to deal first with a question of law which could be addressed in a in dispute between the parties shall be referred to arbitration is a contract.
certiorari proceeding. In the present case, Gonzales’ petition raises a f. Del Monte Corp.-USA v. CA: the provision to submit to arbitration any
question of law, but not a question of jurisdiction. Judge Pimentel acted dispute arising therefrom and the relationship between the parties is part
in accordance with the procedure prescribed in RA 876 when he ordered of that contract and is itself a contract. As a rule, contracts are respected
Gonzales to proceed with arbitration and appointed a sole arbitrator after as the law between the contracting parties and produce effect as between
making the determination that there was indeed an arbitration agreement. them, their assigns, and heirs.
It has been held that as long as a court acts within its jurisdiction and g. The special proceeding under Sec. 6 of RA 876 recognizes the
does not gravely abuse its discretion in the exercise thereof, any contractual nature of arbitration clauses or agreements. (Refer to the
supposed error committed by it will amount to nothing more than an error footnote in Ratio #1b; I highlighted the important part that the court
of judgment reviewable by a timely appeal and not assailable by a special mentioned here so I won’t have to cite it again here.)
civil action of certiorari. Even if the SC would overlook the employment

100
The BF Corporation case had its origins in a complaint for collection of sum of money filed by therein is one of fact. While on its face the question of existence of the arbitration clause is a question of fact that
petitioner BF Corporation against Shangri-la Properties, Inc. The issue raised before the Court was is not proper in a petition for certiorari, yet since the determination of the question obliged the Court of
whether SPI had taken the proper mode of appeal before the Court of Appeals. The question before the Appeals as it did to interpret the contract documents in accordance with R.A. No. 876 and existing
Court of Appeals was whether the trial court had prematurely assumed jurisdiction over the controversy. jurisprudence, the question is likewise a question of law which may be properly taken cognizance of in a
The question of jurisdiction in turn depended on the question of existence of the arbitration clause which petition for certiorari under Rule 65, so the Court held.
 i. This special proceeding is the procedural mechanism for the a. 1st, the proceeding in a petition for arbitration under RA 876 is limited
enforcement of the contract to arbitrate. The jurisdiction of the only to the resolution of the question of whether the arbitration
courts in relation to Sec. 6 of RA 876 as well as the nature of the agreement exists.
proceedings therein was expounded upon in La Naval Drug b. 2nd, the separability of the arbitration clause from the Addendum
Corporation (See Ratio #2e). The Court also said there that if the Contract means that validity or invalidity of the Addendum Contract will
court finds that no such agreement exists, “the proceeding shall be not affect the enforceability of the agreement to arbitrate. Thus,
dismissed.” It also cited that the proceedings are summary in nature. Gonzales’ petition for certiorari should be dismissed.
ii. The same thrust was made in the earlier case of Mindanao Portland 7. The Court says that this would bring us to GR No. 161957 (Note that the
Cement Corp. v. McDonough Construction Co.101 Court the whole time has been dealing with the second GR no.). The
5. Implicit in the nature of the judicial proceedings is the separable or adjudication of the petition in the second GR no. effectively modified part of
independent character of the arbitration clause or agreement. the Decision dated 28 February 2005 (this was the first part of the digest).
a. The doctrine of separability, or severability as other writers call it, a. The Court now holds that the validity of the contract containing the
enunciates that an arbitration agreement is independent of the main agreement to submit to arbitration does not affect the applicability of the
contract. The arbitration agreement is to be treated as a separate arbitration clause itself.
agreement and the arbitration agreement does not automatically b. A contrary ruling would suggest that a party’s mere repudiation of the
terminate when the contract of which it is part comes to an end. main contract is sufficient to avoid arbitration. That is exactly the
b. The separability of the arbitration agreement is especially significant situation that the separabilility doctrine seeks to avoid.
to the determination of whether the invalidity of the main contract c. The Court adds that when it was declared in the first case that the case
also nullifies the arbitration clause. Indeed, the doctrine denotes that should not be brought for arbitration, it should be clarified that the case
the invalidity of the main contract, also referred to as the referred to is the case actually filed by Gonzales before the DENR Panel,
"container" contract, does not affect the validity of the arbitration which was for the nullification of the main contract on the ground of
agreement. Irrespective of the fact that the main contract is invalid, fraud, as it had already been determined that the case should have been
the arbitration clause/agreement still remains valid and enforceable. brought before the regular courts.
c. The separability of the arbitration clause is confirmed in Art. 16(1) d. The MR in the first case should also be denied since it raises the same
of the UNICTRAL Model Law of Art. 21(2) of the UNCITRAL question of jurisdiction, since Gonzales is claiming that the subject of his
Arbitration Rules. complaint is a mining dispute since it involves dispute concerning rights
d. Prima Paint v. Flood & Conklin Manufacturing: this US case held that to mining areas, the FTAA between the parties and claimowners. He adds
“arbitration clauses are ‘separable’ from the contracts in which they are that the Court failed to rule on other issues he raised (like whether he
embedded, and that where no claim is made that fraud was directed to ceded his claims over the mineral deposits, whether the complaint filed
the arbitration clause itself, a broad arbitration clause will be held to before the DENR alleged ultimate facts of fraud, whether the action to
encompass arbitration of the claim that the contract itself was induced by declare nullity of the Addendum Contract on the ground of fraud has
fraud.102 prescribed).
6. There is reason, therefore, to rule against Gonzales when he alleges that Judge i. These are the same issues that Gonzales raised in his rule 45 petition
Pimentel acted with GAD in ordering the parties to proceed with arbitration. in the first case, which were resolved against him in the 2005
Gonzales's argument that the Addendum Contract is null and void and, Decision. Gonzales does not raise any new argument that would
therefore the arbitration clause therein is void as well, is not tenable. sway the Court to alter its holding.

101
Since there obtains herein a written provision for arbitration as well as failure on respondent's part to of another to arbitrate, the court shall hear the parties, and upon being satisfied that the making of the
comply therewith, the court a quo rightly ordered the parties to proceed to arbitration in accordance with agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order
the terms of their agreement (Sec. 6, Republic Act 876). Respondent's arguments touching upon the merits directing the parties to proceed to arbitration. If the making of the arbitration agreement or the failure,
of the dispute are improperly raised herein. They should be addressed to the arbitrators. This proceeding is neglect, or refusal to perform the same be in issue, the court shall proceed summarily to the trial thereof"
merely a summary remedy to enforce the agreement to arbitrate. The duty of the court in this case is not to — the US SC held that the court should not order the parties to arbitrate if the making of the arbitration
resolve the merits of the parties' claims but only to determine if they should proceed to arbitration or not. agreement is in issue. The parties should be ordered to arbitration if, and only if, they have contracted to
102
The US SC did not address Prima Paint's argument that it had been fraudulently induced by F & C to submit to arbitration. Prima Paint was not entitled to trial on the question of whether an arbitration
sign the consulting agreement and held that no court should address this argument. Relying on Sec. 4 of agreement was made because its allegations of fraudulent inducement were not directed to the arbitration
the Federal Arbitration Act — which provides that "if a party claims to be aggrieved by the alleged failure clause itself, but only to the consulting agreement which contained the arbitration agreement.
 ii. As to whether Gonzales had ceded his claims over mineral deposits
in the Addendum Area of Influence, the question is factual, thus not
for proper determination of the SC. The Panel, however, made a
factual finding that Gonzales had through various agreements,
assigned his interest over the mineral claims all in favor of Climax-
Arimco, such that without him assigning it, there would have been
no FTAA to speak of. This finding was affirmed by the CA.
iii. CA also found that Gonzales’ complaint alleged fraud but did not
provide any particulars to substantiate it. The complaint repeatedly
mentioned fraud, oppression, violation of the Constitution and
similar conclusions, but didn’t give any ultimate facts. Sec. 5 of
Rule 8 of the ROC specifically provides that in all averments of
fraud, the circumstances must be stated with particularity to enable
opposing party to controvert the particular facts. However, in this
case, it wasn’t done. What was only included in the body of the
complaint are verbatim reproductions of the contracts,
correspondence of government issuances that reportedly explain the
allegations of fraud and misrepresentation, but these are, at best,
evidentiary matters that should not be included in the pleading.
iv. As to the issue of prescription, the claims of fraud and
misrepresentation are grounds for annulment, thus under Art. 1391
of the Civil Code, should be brought within 4 years, and in case of
fraud, from the time of discovery. But the time of discovery is not
clear. Since the court is not a trier of facts, it shouldn’t rule on the
issue.
 017 KOREA TECHNOLOGIES v. LERMA (PUNSALAN) Commercial Arbitration Board (KCAB) in Seoul Korea pursuant to Art. 15. KOGIES
Jan. 7, 2008 | Velasco, Jr., J. | Arbitration filed a complaint for specific performance against PGSMC before the RTC
Muntinlupa City. RTC granted a TRO. In its complaint, KOGIES alleged that
PETITIONER: Korea Technologies Co., Ltd. PGSMC had initially admitted that the checks stopped were not funded but later on
RESPONDENTS: Hon. Alberto Lerma (Presiding Judge of Branch 256 of RTC claimed that it stopped payment of the checks because “their value was not received”
Muntinlupa), Pacific General Steel Manufacturing Corp. as the former allegedly breached their contract by “altering the quantity and lowering
the quality of the machinery and equipment” installed in the plant and failed to make
SUMMARY: Pacific General Steel Manufacturing Corp. (PGSMC) and Korea the plant operational although it earlier certified the contrary as shown in a Jan. 22,
Technologies Co., Ltd (KOGIES) entered into a Contract whereby the latter would 1998 Certificate. PGSMC filed an Opposition to the TRO arguing that KOGIES
set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite. Said contract was was not entitled to the TRO since Art. 15 (Arbitration Clause) was null and void
executed in the PH. Thereafter, an amendment was made stipulating that KOGIES for being against public policy as it ousts the local courts of jurisdiction over the
will ship the machinery and facilities necessary for manufacturing LPG cylinders for instant controversy. (RTC Order #1) RTC issued an order denying the application
which PGSMC would pay $1,224,000.00. KOGIES would install and initiate the for a writ of preliminary injunction because PGSMC had paid KOGIES
operation of the plant for which PGSMC would pay upon the plant’s production of $1,224,000.00, the value of the machineries and equipment as shown in the contract
the 11-kg LPG cylinder samples. PGSMC then entered into a lease contract with such that KOGIES no longer had proprietary rights over them. RTC also held that Art.
Worth Properties Inc. for use of its property to house the LPG manufacturing plant. 15 was invalid as it tended to oust the trial court or any other court jurisdiction over
However, gleaned from the Certificate executed by the parties after the installation any dispute that may arise between the parties. Upon filing an MR as well as a motion
of the plant, the initial operation could not be conducted as PGSMC encountered for inspection of things, the RTC granted the motion for inspection but denied the MR
financial difficulties affecting the supply of materials, thus forcing the parties to agree to which KOGIES filed a petition for certiorari with the CA. The CA affirmed and
that KOGIES would be deemed to have complied with the terms and conditions of dismissed said petition.
the contract. For the remaining $306k for the installation and initial operation of the On validity of arbitration clause: the CA agreed with the RTC that an arbitration
plant, PGSMC issued 2 postdated checks which are P4.5M each. When KOGIES clause which provided for a final determination of the legal rights of the parties to the
deposited the checks, these were dishonored due to “PAYMENT STOPPED.” So contract by arbitration was against public policy.
KOGIES sent a demand letter to PGSMC threatening criminal action for violation of Issue: WoN the arbitration clause in Art. 15 of the Contract between the parties
BP 22 in case of non-payment. PGSMC replied that the 2 checks it issued to KOGIES are null and void for being contrary to public policy – NO, Art. 2044 of the Civil
were stopped for reasons previously made known to KOGIES. PGSMC informed Code sanctions the validity of mutually agreed arbitrational clause or the finality and
KOGIES that they were cancelling their Contract on the ground that KOGIES had binding effect of an arbitral award. The arbitration clause was mutually and
altered the quantity and lowered the quality of the machineries and equipment it voluntarily agreed upon by the parties. It has not been shown to be contrary to any
delivered to PGSMC, and that PGSMC would dismantle and transfer the machineries, law, or against morals, good customs, public order or public policy. SC has also
equipment, and facilities installed in the Carmona plant. PGSMC eventually filed a sanctioned the validity of arbitration clauses in a number of cases. (Ratio 8)
complaint for estafa against Kang, President of KOGIES. KOGIES wrote PGSMC Having said that the instant arbitration clause is not against public policy, we come to
informing the latter that PGSMC could not unilaterally rescind their contract nor the question on what governs an arbitration clause specifying that in case of any
dismantle and transfer the machineries and equipment on mere imagined violations dispute arising from the contract, an arbitral panel will be constituted in a foreign
by KOGIES. KOGIES also insisted that their disputes should be settled by country and the arbitration rules of the foreign country would govern and its award
arbitration as agreed upon in Art. 15103, the arbitration clause of their contract. shall be final and binding.
KOGIES instituted and Application for Arbitration before the Korean Commercial As signatory to the Arbitration Rules of the UNCITRAL Model Law on International
Arbitration Board (KCAB) in Seoul Korea pursuant to Art. 15. unilaterally rescind Commercial Arbitration 41 of the United Nations Commission on International Trade
their contract nor dismantle and transfer the machineries and equipment on mere Law (UNCITRAL) in the New York Convention on June 21, 1985, the Philippines
imagined violations by KOGIES. KOGIES also insisted that their disputes should be committed itself to be bound by the Model Law. We have even incorporated the
settled by arbitration as agreed upon in Art. 15, the arbitration clause of their Model Law in RA No. 9285 (Alternative Dispute Resolution Act of 2004)
contract. KOGIES instituted and Application for Arbitration before the Korean promulgated on April 2, 2004. While RA 9285 was passed only in 2004, it nonetheless

103
Article 15. Arbitration. — All disputes, controversies, or differences which may arise Commercial Arbitration Rules of the Korean Commercial Arbitration Board. The award
between the parties, out of or in relation to or in connection with this Contract or for the rendered by the arbitration(s) shall be final and binding upon both parties concerned.
breach thereof, shall finally be settled by arbitration in Seoul, Korea in accordance with the
 applies in the instant case since it is a procedural law which has a retroactive effect. a. Contract executed in the PH
KOGIES filed an application for arbitration before the KCAB on July 1, 1998 and it b. April 7, 1997: parties executed in Korea an amendment stipulating that
is still pending because no arbitral award has yet been rendered. Thus, RA 9285 is KOGIES will ship the machinery and facilities necessary for
applicable to the instant case. Well-settled is the rule that procedural laws are manufacturing LPG cylinders for which PGSMC would pay
construed to be applicable to actions pending and undetermined at the time of their $1,224,000.00. KOGIES would install and initiate the operation of the
passage, and are deemed retroactive in that sense and to that extent. plant for which PGSMC bound itself to pay $306,000.00 upon the
Grounds for judicial review different in domestic and foreign arbitral awards plant’s production of the 11-kg LPG cylinder samples.
The differences between the two are the specific grounds or conditions that vest c. Thus, the contract price amounted to $1,530,000.00.
jurisdiction over our courts to review the awards. Foreign arbitral awards: must first 4. Oct. 14, 1997: PGSMC entered into a Contract of Lease with Worth Properties,
be confirmed by the RTC; the grounds for setting aside, rejecting or vacating the Inc. (Worth) for use of Worth’s 5,079 sqm. Property with a 4,032 sqm. warehouse
award by the RTC are provided under Art. 34(2) of the UNCITRAL Model Law. building to house the LPG manufacturing plant.
Final domestic arbitral awards: also need confirmation by RTC pursuant to RA 876 a. Monthly rental – P322,560 commencing Jan. 1, 1998 with a 10% annual
and shall be recognized as final and executory decisions of the RTC; may only be increment clause.
assailed before the RTC and vacated on the grounds under Sec. 25 of RA 876. b. Machineries, equipment, and facilities for the manufacture of LPG
On issue of ownership as proper for arbitration: KOGIES assails the CA ruling cylinders were shipped, delivered, and installed in the Carmona plant.
that the issue petitioner raised on whether the total contract price of $1,530,000.00 c. PGSMC paid KOGIES $1,224,000.00
was for the whole plant and its installation is beyond the ambit of a Petition for 5. However, gleaned from the Certificate executed by the parties after the
certiorari. SC finds this untenable. It is settled that questions of fact cannot be raised installation of the plant, the initial operation could not be conducted as PGSMC
in an original action for certiorari. Whether or not there was full payment for the encountered financial difficulties affecting the supply of materials, thus forcing
machineries and equipment and installation is indeed a factual issue prohibited by the parties to agree that KOGIES would be deemed to have complied with the
Rule 65. However, what appears to constitute GAD is the RTC order in resolving the terms and conditions of the contract (in Fact#3)
issue of the ownership of the plant when it is the arbitral body (KCAB) and not the 6. For the remaining $306k for the installation and initial operation of the plant,
RTC which has jurisdiction and authority over the said issue. The RTC’s PGSMC issued 2 postdated checks which are P4.5M each.
determination of such factual issue constitutes GAD and must be reversed and set 7. When KOGIES deposited the checks, these were dishonored due to “PAYMENT
aside. STOPPED.”
While PGSMC may have been granted the right to dismantle and transfer the subject a. So KOGIES sent a demand letter to PGSMC threatening criminal action
equipment and machineries, it does not have the right to convey or dispose of the for violation of BP 22 in case of non-payment.
same considering the pending arbitral proceedings to settle the differences of the b. The wife of PGSMC’s President faxed a letter to KOGIES’ President
parties. PGSMC therefore must preserve and maintain the subject equipment and (who was at a Makati City hotel) complaining that not only did KOGIES
machineries with the diligence of a good father of a family until final resolution of deliver a different brand of hydraulic press form the agreed one but it
the arbitral proceedings and enforcement of the award, if any. had not delivered several equipment parts already paid for.
8. PGSMC replied that the 2 checks it issued to KOGIES were stopped for reasons
DOCTRINE: Being an inexpensive, speedy and amicable method of settling previously made known to KOGIES.
disputes, arbitration – along with mediation, conciliation and negotiation – is 9. June 1, 1998: PGSMC informed KOGIES that they were cancelling their Contract
encouraged by the SC. Aside from unclogging judicial dockets, arbitration also on the ground that KOGIES had altered the quantity and lowered the quality of
hastens the resolution of disputes, especially of the commercial kind. It is thus the machineries and equipment it delivered to PGSMC, and that PGSMC would
regarded as the “wave of the future in international civil and commercial disputes dismantle and transfer the machineries, equipment, and facilities installed in the
Carmona plant.
10. 5 days later, PGSMC filed before the Office of the Public Prosecutor an Affidavit-
FACTS: Complaint for estafa against Mr. Dae Hyun Kang, President of KOGIES.
1. Korea Technologies Co., Ltd. (KOGIES) is a Korean corp. engaged in the supply 11. June 15, 1998: KOGIES wrote PGSMC informing the latter that PGSMC could
and installation of Liquefied Petroleum Gas (LPG) Cylinder manufacturing not unilaterally rescind their contract nor dismantle and transfer the machineries
plants and equipment on mere imagined violations by KOGIES.
2. Pacific General Steel Manufacturing Corp. (PGSMC) is a domestic corp. a. KOGIES also insisted that their disputes should be settled by
3. March 5, 1997, PGSMC and KOGIES executed a Contract whereby KOGIES
would set up an LPG Cylinder Manufacturing Plant in Carmona, Cavite.
 arbitration as agreed upon in Art. 15 104, the arbitration clause of had altered the quantity and lowered the quality of the machinery, equipment and
their contract. facilities it delivered to the plant.
12. PGSMC reiterated the contents of its letter threatening the dismantling and a. It claimed that it performed all undertakings under the contract and had
transferring of the machineries, equipment, and facilities installed in the plant. produced certified samples of LPG cylinders
13. KOGIES instituted and Application for Arbitration before the Korean b. Avers that whatever was unfinished was PGSMC’s fault since it failed
Commercial Arbitration Board (KCAB) in Seoul Korea pursuant to Art. 15. to procure raw materials due to lack of funds.
14. July 3, 1998: KOGIES filed a complaint for specific performance against c. Relied on Chung Fu Industries (Phils) v CA to insist that the arbitration
PGSMC before the RTC Muntinlupa City. RTC granted a TRO. clause was valid.
a. In its complaint, KOGIES alleged that PGSMC had initially admitted 19. KOGIES also filed an MR of the RTC order (Fact 17) denying its application for
that the checks stopped were not funded but later on claimed that it injunctive writ claiming that the contract was not merely for machinery and
stopped payment of the checks because “their value was not received” facilities but was for the sale of an “LPG manufacturing plant” consisting of
as the former allegedly breached their contract by “altering the quantity “supply of all the machinery and facilities” and “transfer technology” for a total
and lowering the quality of the machinery and equipment” installed in contract price of $1,530,000.00 such that the dismantling and transfer of
the plant and failed to make the plant operational although it earlier machinery and facilities would result in the dismantling and transfer of the very
certified the contrary as shown in a Jan. 22, 1998 Certificate. plant itself to the great prejudice of KOGIES as the still unpaid owner/seller of
b. KOGIES also averred that PGSMC violated Art. 15 of their Contract. the plant.
c. KOGIES also asked that PGSMC be restrained from dismantling and a. KOGIES also points out that Art. 15 (arbitration clause) was a valid
transferring the machinery and equipment installed in the plant which arbitration stipulation under Art. 2044 of the Civil Code based on
PGSMC threatened to do. jurisprudence (Fact 18a)
15. PGSMC filed an Opposition to the TRO arguing that KOGIES was not entitled 20. PGSMC filed a Motion for Inspection of Things to determine whether there really
to the TRO since Art. 15 (Arbitration Clause) was null and void for being was an alteration of the quantity and lowering of quality of the machineries and
against public policy as it ousts the local courts of jurisdiction over the equipment, and whether these were properly installed.
instant controversy. a. KOGIES opposed positing that the queries and issues raised in the
16. PGSMC filed its Answer with Compulsory Counterclaim asserting that it had the motion for inspection fell under the arbitration clause in the contract.
full right to dismantle and transfer the machineries and equipment because it had 21. RTC issued an Order (RTC Order #2)
paid for them in full as stipulated in the contract a. granting PGSMC’s motion for inspection
a. That KOGIES was note entitled to the P9M covered by the checks for b. denying KOGIES MR
failing to completely install and make the plant operational c. denying KOGIES motion to dismiss PGSMC’s compulsory
b. That KOGIES was liable for P4.5M in damages for altering the quantity counterclaims as these counterclaims fell within the requisites of
and lowering the quality of the machineries and equipment. compulsory counterclaims
c. PGSMC also averred that it has already paid P2,257,920.00 in rent to 22. KOGIES filed an urgent MR of the said order with regard to Fact21(a) and (b).
Worth and it was not willing to further shoulder the cost of renting the 23. Without waiting for the resolution of the urgent MR, KOGIES filed with the CA
premises of the plant considering that the LPG cylinder manufacturing a petition for certiorari seeking annulment of the RTC Orders (fact 17 and 21)
plant never became operational. and praying for the issuance of writs of prohibition, mandamus, and preliminary
17. (RTC Order #1) RTC issued an order denying the application for a writ of injunction to enjoin the RTC and PGSMC from inspecting, dismantling and
preliminary injunction because PGSMC had paid KOGIES $1,224,000.00, the transferring the machineries and equipment in the Carmona plant and to direct
value of the machineries and equipment as shown in the contract such that the RTC to enforce the specific agreement on arbitration to resolve the dispute.
KOGIES no longer had proprietary rights over them. 24. RTC denied the urgent MR and directed the Branch Sheriff to proceed with the
a. RTC also held that Art. 15 was invalid as it tended to oust the trial court inspection of the machineries and equipment in the plant.
or any other court jurisdiction over any dispute that may arise between 25. KOGIES thereafter filed a Supplement to the petition with the CA informing said
the parties. court about the RTC order aforementioned. KOGIES asserted that the Branch
18. KOGIES filed its Reply to Answer and Answer to Counterclaim denying that it Sheriff did not have the technical expertise to ascertain whether or not the

104
Article 15. Arbitration. — All disputes, controversies, or differences which may arise Commercial Arbitration Rules of the Korean Commercial Arbitration Board. The award
between the parties, out of or in relation to or in connection with this Contract or for the rendered by the arbitration(s) shall be final and binding upon both parties concerned.
breach thereof, shall finally be settled by arbitration in Seoul, Korea in accordance with the
 machineries and equipment conformed to the specifications in the contract and ASIDE;
were properly installed. (2) The September 21, 1998 and October 19, 1998 RTC Orders in Civil Case No. 98-117
26. CA affirmed the RTC orders and dismissed KOGIES’ petition for certiorari. are REVERSED and SET ASIDE;
a. RTC did not gravely abuse its discretion in issuing the said 2 orders. (3) The parties are hereby ORDERED to submit themselves to the arbitration of their
b. CA reasoned that KOGIES’ contention that the total contract price for dispute and differences arising from the subject Contract before the KCAB; and
$1,530,000.00 was for the whole plant and had not been fully paid was (4) PGSMC is hereby ALLOWED to dismantle and transfer the equipment and
contrary to RTC’s finding that PGSMC fully paid the price of machineries, if it had not done so, and ORDERED to preserve and maintain them until the
$1,224,000.00 which was for all the machineries and equipment. finality of whatever arbitral award is given in the arbitration proceedings.
c. This determination of the RTC was a factual finding beyond the ambit
of the petition for certiorari.
27. On validity of arbitration clause: the CA agreed with the RTC that an RATIO:
arbitration clause which provided for a final determination of the legal rights of (NOTE: I didn’t include the procedural issue on payment of the docket fees and on
the parties to the contract by arbitration was against public policy. interlocutory orders anymore since it didn’t look like it depended on the arbitration
28. On issue of nonpayment of docket fees and non-attachment of a certificate of topic)
non-forum shopping by PGSMC, CA held that PGSMC’s counterclaims were Procedural issue: Prematurity of the petition before the CA
compulsory ones and payment of docket fees was not required since the Answer 1. SC does not think that KOGIES was guilty of forum shopping in filing the
with the Counterclaim was not an initiatory pleading. Same reasoning was done petition for certiorari.
with the certificate of non-forum shopping. a. Note that KOGIES’ MR of the RTC order had already been denied.
29. CA held that the petition for certiorari had been filed prematurely since KOGIES Thus, its only remedy was to assail the RTC’s interlocutory order via
did not wait for the resolution of its urgent MR of the RTC Order which was the petition for certiorari under Rule 65.
plain, speedy, and adequate remedy available. 2. While the MR of KOGIES of the RTC Order #2 has not yet been resolved, the
a. RTC must be given the opportunity to correct any alleged error it has circumstances of the case would allow an exception to the rule that before
committed, and that since the assailed orders were interlocutory, these certiorari may be availed of, the petitioner must have filed an MR and said motion
cannot be subject of a petition for certiorari. should have been first resolved by the court a quo.
30. Hence this petition for review on certiorari under Rule 45. a. Reason: to enable the lower court, to pass upon and correct its mistakes
without the intervention of the higher court.
3. RTC Order #2 which also directed the Sheriff to inspect the plant, equipment, and
ISSUE/s: facilities when he is not competent and knowledgeable on said matters is
1. WoN the question of ownership over the machinery and facilities is a question of evidently flawed and devoid of any legal support.
fact beyond the ambit of a petition for certiorari – a. There is also an urgent necessity to resolve the issue on the dismantling
2. WoN the petition was filed prematurely without waiting for the resolution of the of the facilities and any further delay would prejudice KOGIES’
MR of the RTC order or without giving the RTC an opportunity to correct itself interests. (real and imminent threat of irreparable destruction or
– NO, the circumstances in the case provide an exception to the rule that before substantial damage to KOGIES’ equipment and machineries)
certiorari may be availed of, the petitioner must have filed a motion for 4. Resort to certiorari based on the gravely abusive orders of the RTC sans the
reconsideration and said motion should have been first resolved by the court a ruling on the urgent MR was proper.
quo.
3. WoN the arbitration clause in Art. 15 of the Contract between the parties are null (MAIN ISSUE) Article 15 of the Contract is VALID
and void for being contrary to public policy – NO, Art. 2044 of the Civil Code 5. SC agrees with KOGIES that the RTC and CA erred in ruling that the arbitration
sanctions the validity of mutually agreed arbitrational clause or the finality and clause is null and void.
binding effect of an arbitral award. The arbitration clause was mutually and 6. Established is the rule that the law of the place where the contract is made
voluntarily agreed upon by the parties. It has not been shown to be contrary to governs. (Lex loci contractus)
any law, or against morals, good customs, public order or public policy. SC has a. The contract was perfected in the PH; therefore, our laws ought to
also sanctioned the validity of arbitration clauses in a number of cases. govern.

RULING: WHEREFORE, this petition is PARTLY GRANTED, in that:

(1) The May 30, 2000 CA Decision in CA-G.R. SP No. 49249 is REVERSED and SET
 b. Nonetheless, Art. 2044105 of the Civil Code sanctions the validity of the commercial kind. It is thus regarded as the “wave of the future in
mutually agreed arbitral clause or the finality and binding effect of an international civil and commercial disputes.
arbitral award. 9. Having said that the instant arbitration clause is not against public policy, we
c. Arts. 2038-2040 as cited in the provision refer to instances where a come to the question on what governs an arbitration clause specifying that in case
compromise or an arbitral award may be voided, rescinded, or annulled, of any dispute arising from the contract, an arbitral panel will be constituted in a
but these would not denigrate the finality of the arbitral award. foreign country and the arbitration rules of the foreign country would govern and
7. The arbitration clause was mutually and voluntarily agreed upon by the parties. its award shall be final and binding.
It has not been shown to be contrary to any law, or against morals, good customs,
public order or public policy. RA 9285 incoporated the UNCITRAL Model law to which PH is a signatory
a. There has been no showing that the parties have not dealt with each 10. For domestic arbitration proceedings, we have particular agencies to arbitrate
other on equal footing. disputes arising from contractual relations.
b. SC finds no reason why the arbitration clause should not be respected 11. In case a foreign arbitral body is chosen by the parties, the arbitration rules of our
and complied with by both parties. domestic arbitration bodies would not be applied.
c. Jurisprudence provides that submission to arbitration is a contract and 12. As signatory to the Arbitration Rules of the UNCITRAL Model Law on
that a clause in the contract providing all matters in dispute between the International Commercial Arbitration 41 of the United Nations Commission on
partes shall be referred to arbitration is a contract. International Trade Law (UNCITRAL) in the New York Convention on June 21,
1985, the Philippines committed itself to be bound by the Model Law.
(MAIN ISSUE) Arbitration clause not contrary to public policy a. We have even incorporated the Model Law in RA No. 9285 (Alternative
8. The arbitration clause stipulating that arbitration be done in Seoul, Korea in Dispute Resolution Act of 2004) promulgated on April 2, 2004.
accordance with the Commercial Arbitration Rule of the KCAB, and that the b. Pertinent provisions are Sec 19106 and 20107 of Chapter 4 of the Model
arbitral award is final and binding, is not contrary to public policy. law
a. SC has sanctioned the validity of arbitration clauses in a number of 13. While RA 9285 was passed only in 2004, it nonetheless applies in the instant case
cases. since it is a procedural law which has a retroactive effect.
b. 1957 case of Eastboard Navigation Ltd. v. Juan Ysmael and Co., Inc.: 14. KOGIES filed an application for arbitration before the KCAB on July 1, 1998
an arbitration clause to resolve differences and breaches of mutually and it is still pending because no arbitral award has yet been rendered.
agreed contractual terms is valid. 15. Thus, RA 9285 is applicable to the instant case. Well-settled is the rule that
c. BF Corporation v. CA: in this jurisdiction, arbitration has been held procedural laws are construed to be applicable to actions pending and
valid and constitutional. Even before the approval on June 19, 1953 of undetermined at the time of their passage, and are deemed retroactive in that sense
RA No. 876, this Court has countenanced the settlement of disputes and to that extent.
through arbitration. RA No. 876 was adopted to supplement the New a. GR: the retroactive application of procedural laws does not violate any
Civil Code's provisions on arbitration." personal rights because no vested right has yet attached nor arisen from
d. LM Power Engineering Corp. v Capitol Industrial Construction them.
Groups, Inc.: being an inexpensive, speedy and amicable method of
settling disputes, arbitration – along with mediation, conciliation and Pertinent features of RA 9285 applying and incorporating the UNCITRAL Model Law
negotiation – is encouraged by the SC. Aside from unclogging judicial 16. RTC must refer to arbitration in proper cases
dockets, arbitration also hastens the resolution of disputes, especially of a. Sec. 24108, the RTC does not have jurisdiction over disputes that are

107
Art. 2044 – Any stipulation that the arbitrators’ award or decision shall be final,
105
SEC. 20. Interpretation of Model Law. — In interpreting the Model Law, regard shall be
is valid, without prejudice to Articles 2038, 2039, and 2040. had to its international origin and to the need for uniformity in its interpretation and resort may
106 be made to the travaux preparatories and the report of the Secretary General of the United
SEC. 19. Adoption of the Model Law on International Commercial Arbitration. —
International commercial arbitration shall be governed by the Model Law on International Nations Commission on International Trade Law dated March 25, 1985 entitled, "International
Commercial Arbitration (the "Model Law") adopted by the United Nations Commission on Commercial Arbitration: Analytical Commentary on Draft Trade identi ed by reference
International Trade Law on June 21, 1985 (United Nations Document A/40/17) and number A/CN. 9/264.
108
recommended for enactment by the General Assembly in Resolution No. 40/72 approved on SEC. 24. Referral to Arbitration. — A court before which an action is brought in a matter
December 11, 1985, copy of which is hereto attached as Appendix "A". which is the subject matter of an arbitration agreement shall, if at least one party so requests
not later than the pre-trial conference, or upon the request of both parties thereafter, refer the
 properly the subject of arbitration pursuant to an arbitration clause, and grounds for setting aside, rejecting or vacating the award by the RTC
mandates the referral to arbitration in such cases. are provided under Art. 34(2) of the UNCITRAL Model Law.
17. Foreign arbitral awards must be confirmed by the RTC c. Final domestic arbitral awards: also need confirmation by RTC
a. While mutually stipulated by the parties in the arbitration clause to be pursuant to RA 876 and shall be recognized as final and executory
final and binding are not immediately enforceable or cannot be decisions of the RTC; may only be assailed before the RTC and vacated
implemented immediately. on the grounds under Sec. 25 of RA 876.
b. Sec. 35 of the UNCITRAL Model Law stipulates the requirement for 20. RTC decision of assailed foreign arbitral award appealable
the arbitral award to be recognized by a competent court for a. Sec. 46 of RA 9285 (see end of digest) provides for an appeal before
enforcement, which court under Sec. 36 of the same may refuse the CA as the remedy of an aggrieved party in cases where RTC sets
recognition or enforcement on the grounds provided for. aside, vacates, modifies, or corrects an arbitral award.
c. RA 9285 incorporated these to Secs. 42-44 relative to Secs. 47-48. b. Thereafter, CA decision may further be appealed or reviewed before the
(check end of digest because there are many provisions) Court through petition for review under Rule 45.
d. It is now clear that foreign arbitral awards (when confirmed by the
RTC) are deemed not as a judgment of a foreign court but as a foreign Issue on ownership of plant proper for arbitration
arbitral award, and when confirmed, are enforced as final and 21. KOGIES assails the CA ruling that the issue petitioner raised on whether the total
executory decisions of our courts of law. contract price of $1,530,000.00 was for the whole plant and its installation is
e. The concept of final and binding arbitral award is similar to judgments beyond the ambit of a Petition for certiorari.
or awards given by some of our quasi-judicial bodies, like the 22. SC finds this untenable. It is settled that questions of fact cannot be raised in an
NLRC and Mines Adjudication Board, whose final judgments are original action for certiorari. Whether or not there was full payment for the
stipulated to be final and binding but not immediately executory in machineries and equipment and installation is indeed a factual issue prohibited
the sense that they may still be judicially reviewed, upon the by Rule 65.
instance of any party. 23. However, what appears to constitute GAD is the RTC order in resolving the issue
f. Therefore, the final foreign arbitral awards are similarly situated of the ownership of the plant when it is the arbitral body (KCAB) and not the
in that they need not be confirmed by the RTC. RTC which has jurisdiction and authority over the said issue.
18. The RTC has jurisdiction to review foreign arbitral awards 24. The RTC’s determination of such factual issue constitutes GAD and must be
a. Sec 42 in relation to Sec 45 of RA 9285 (see end of digest) designated reversed and set aside.
and vested RTC with the specific authority and jurisdiction to set aside,
reject, or vacate a foreign arbitral award on grounds under Art. 34 of the RTC has interim jurisdiction to protect the rights of the parties
UNCITRAL Model law. 25. While the issue of the proper installation of the equipment and machineries might
b. Thus, while the RTC does not have jurisdiction over disputes governed well be under the primary jurisdiction of the arbitral body to decide, yet the RTC
by arbitration mutually agreed upon by the parties, said foreign arbitral under Sec. 28 of RA 9285 has jurisdiction to hear and grant interim measures to
award is subject to judicial review by the RTC which can set aside, protect vested rights of the parties.
reject, or vacate it. 26. Art. 17 J. of the UNCITRAL Model Law also grants courts power and jurisdiction
c. Chung Fu Industries case relied upon by KOGIES is applicable insofar to grant interim measures of protection.
as the foreign arbitral awards, while final and binding, do not oust courts 27. Considering that the equipment and machineries are in the possession of PGSMC,
of jurisdiction since these arbitral awards are not absolute and without it has the right to protect and preserve the equipment and machineries in the best
exceptions as they are still judicially reviewable. Chap. 7 of RA 9285 way it can.
made it clear that all arbitral awards (domestic or foreign) are subject to a. Considering that the LPG plant was non-operational, PGSMC has the
judicial review on specific on specific grounds provided for. right to dismantle, and transfer the equipment and machineries either
19. Grounds for judicial review different in domestic and foreign arbitral awards for their protection and preservation or for the better way to make good
a. The differences between the two are the specific grounds or conditions use of them which is ineluctably within the management discretion of
that vest jurisdiction over our courts to review the awards. PGSMC.
b. Foreign arbitral awards: must first be confirmed by the RTC; the 28. The reason that maintaining the equipment and machineries in Worth’s property

parties to arbitration unless it finds that the arbitration agreement is null and void, inoperative
or incapable of being performed.
 is not to the best interest of PGSMC due to the prohibitive rent while the LPG awards not covered by the New York Convention shall be done in accordance with
plant as set-up is not operational. procedural rules to be promulgated by the Supreme Court. The Court may, on grounds
a. PGSMC was losing P322,560 as monthly rentals or P3.87M for 1998 of comity and reciprocity, recognize and enforce a non-convention award as a
alone without considering the annual rent increment in maintaining the convention award.
plant.
29. While the KCAB can rule on motions or petitions relating to the preservation or SEC. 44. Foreign Arbitral Award Not Foreign Judgment. — A foreign arbitral award
transfer of the equipment and machineries as an interim measure, yet on when confirmed by a court of a foreign country, shall be recognized and enforced as a
hindsight, the RTC Order #1 allowing the transfer of equipment and machineries foreign arbitral award and not as a judgment of a foreign court.
given the non-recognition by the lower courts of the arbitral clause, has accorded
A foreign arbitral award, when confirmed by the Regional Trial Court, shall be
an interim measure of protection to PGSMC which would otherwise been
enforced in the same manner as final and executory decisions of courts of law of the
irreparably damaged.
30. KOGIES is not unjustly prejudiced as it has already been paid a substantial Philippines.
amount based on the contract.
a. Moreover, KOGIES is amply protected by the arbitral action it has SEC. 45. Rejection of a Foreign Arbitral Award. — A party to a foreign arbitration
instituted before the KCAB, the award of which can be enforced in our proceeding may oppose an application for recognition and enforcement of the arbitral
jurisdiction through the RTC. award in accordance with the procedures and rules to be promulgated by the Supreme
b. Besides, by our decision, PGSMC is compelled to submit to arbitration Court only on those grounds enumerated under Article V of the New York Convention.
pursuant to the valid arbitration clause of its contract with KOGIES. Any other ground raised shall be disregarded by the Regional Trial Court.

PGSMC to preserve the subject equipment and machineries SEC. 46. Appeal from Court Decision or Arbitral Awards. — A decision of the
31. While PGSMC may have been granted the right to dismantle and transfer the Regional Trial Court confirming, vacating, setting aside, modifying or correcting an
subject equipment and machineries, it does not have the right to convey or arbitral award may be appealed to the Court of Appeals in accordance with the rules
dispose of the same considering the pending arbitral proceedings to settle the and procedure to be promulgated by the Supreme Court.
differences of the parties. PGSMC therefore must preserve and maintain the The losing party who appeals from the judgment of the court confirming an arbitral
subject equipment and machineries with the diligence of a good father of a award shall be required by the appellate court to post a counterbond executed in favor
family until final resolution of the arbitral proceedings and enforcement of of the prevailing party equal to the amount of the award in accordance with the rules
the award, if any. to be promulgated by the Supreme Court.

SEC. 47. Venue and Jurisdiction. — Proceedings for recognition and enforcement of
an arbitration agreement or for vacations, setting aside, correction or modification of
SEC. 42. Application of the New York Convention. — The New York Convention an arbitral award, and any application with a court for arbitration assistance and
shall govern the recognition and enforcement of arbitral awards covered by said supervision shall be deemed as special proceedings and shall be led with the
Convention. Regional Trial Court (i) where arbitration proceedings are conducted; (ii) where the
The recognition and enforcement of such arbitral awards shall be filed with the asset to be attached or levied upon, or the act to be enjoined is located; (iii) where any
Regional Trial Court in accordance with the rules of procedure to be promulgated by of the parties to the dispute resides or has his place of business; or (iv) in the National
the Supreme Court. Said procedural rules shall provide that the party relying on the Judicial Capital Region, at the option of the applicant.
award or applying for its enforcement shall file with the court the original or
authenticated copy of the award and the arbitration agreement. If the award or SEC. 48. Notice of Proceeding to Parties. — In a special proceeding for recognition
agreement is not made in any of the official languages, the party shall supply a duly and enforcement of an arbitral award, the Court shall send notice to the parties at their
certified translation thereof into any of such languages. address of record in the arbitration, or if any part cannot be served notice at such
The applicant shall establish that the country in which foreign arbitration award was address, at such party's last known address. The notice shall be sent al least fifteen (15)
made in party to the New York Convention. days before the date set for the initial hearing of the application.

SEC. 43. Recognition and Enforcement of Foreign Arbitral Awards Not Covered by
the New York Convention. — The recognition and enforcement of foreign arbitral
 018 Mabuhay v. Sembcorp (Sarmiento) 3. Mabuhay contends that Dr. Anan, the arbitrator did not have the authority to
December 5, 2018 | Tijam, J. | Arbitral Awards settle the dispute. However, her appointment was in accordance with the rules as
she was nominated by the National Committee.
PETITIONER: Mabuhay Holdings Corporation 4. Dispute is also not an intracorporate controversy, thus within the jurisdiction
of the ICC.
RESPONDENTS: Sembcorp Logistics Limited 5. Enforcement of final award not against public policy as the court adopts a
narrow interpretation of what is against public policy
SUMMARY: Mabuhay and IDHI incorporated WJSC and WJNA. Then
Mabuhay and IDHI entered into a Shareholders’ Agreement with Sembcorp DOCTRINE: In addition to our arbitration laws, our courts, in recognizing or
wherein the latter acquired shares of WJSC and WJNA. Mabuhay and IDHI enforcing a foreign arbitral award, shall also take into consideration the laws
jointly guaranteed Sembcorp a minimum return in investment. In the agreement, applied by the arbitral tribunal. These may comprise the substantive law of the
there is an arbitration clause wherein disputes in the agreement, other than intra- contract and the procedural rules or the rules governing the conduct of
corporate controversies sall be settled through arbitration, to take place in arbitration proceedings.
Singapore. But the incorporated corps incurred losses. Sembcorp filed a Request
for Arbitration before the International Court of Arbitration of the International
Chamber of Commerce (ICC) in accordance with the Agreement and sought
payment for the obligation and damages. Final Award in favor of Sembcorp was FACTS:
rendered by Dr. Anan Chantara-Opakorn the Sole Arbitrator appointed by the 1. Petitioner Mabuhay Holdings Corporation (Mabuhay) and Infrastructure
ICC. Sembcorp filed a Petition for Recognition and Enforcement of a Foreign Development & Holdings, Inc. (IDHI) are corporations duly organized and
Arbitral Award before the RTC of Makati City. Mabuhay filed an Opposition existing under the Philippine Laws.
citing the following grounds for non-enforcement under Article V of the 1958
Convention on the Recognition and Enforcement of Foreign Arbitral Awards 2. Respondent Sembcorp Logistics Limited (Sembcorp), formerly known as
(New York Convention): (1) the award deals with a conflict not falling within Sembawang Maritime Limited, is a company incorporated in the Republic of
the terms of the submission to arbitration (intra-corporate controversy); (2) the Singapore.
composition of the arbitral authority was not in accordance with the agreement
of the parties; and (3) recognition or enforcement of the award would be contrary 3. Mabuhay and IDHI incorporated Water Jet Shipping Corporation (WJSC) in
to the public policy of the Philippines. ISSUE: Whether or not Mabuhay able to the Philippines to engage in the venture of carrying passengers on a common
establish a ground for refusing the enforcement of the Final Award under our carriage by inter-island fast ferry.
applicable laws and jurisprudence on arbitration. HELD: NO. The final award a. They also incorporated Water Jet Netherlands Antilles, N.V.
was rendered in compliance with the ICC rules. (WJNA) in Curasao, Netherlands.
b. Their respective shareholding percentage are as follows:
During the filing of the request for Arbitration, the ICC Rules in effect was the
ICC Rules of Arbitration 1998.

1. Mabuhay thus contends that filing a petition for review and not a notice of
appeal is the proper remedy to contest the RTC's refusal to enforce the Final
Award. The Court notes, however, that the Special ADR Rules took effect in
2009. Sembcorp's notice of appeal was filed only in 2008. 4. Mabuhay, IDHI, and Sembcorp entered into a Shareholders' Agreement
2. The Court's review of a CA Decision is discretionary and limited to specific setting out the terms and conditions governing their relationship in
grounds provided under the Special ADR Rules. Mabuhay failed to specify any connection with a planned business expansion of WJSC and WJNA.
of the grounds. Sembcorp decided to invest in the said corporations.
a. As a result of Sembcorp's acquisition of shares, Mabuhay and IDHI's
shareholding percentage in the said corporations were reduced, as
follows:
 7. Sembcorp sent a Final Demand to Mabuhay to pay the Guaranteed Return.
Mabuhay requested for three (3) months to raise the necessary funds but still
failed to pay any amount after the lapse of the said period.
a. Sembcorp filed a Request for Arbitration before the International
Court of Arbitration of the International Chamber of Commerce
(ICC) in accordance with the Agreement and sought payment for the
5. Pursuant to Article 13 of the Agreement, Mabuhay and IDHI voluntarily obligation and damages.
agreed to jointly guarantee that Sembcorp would receive a minimum
accounting return of US$929,875.50 (Guaranteed Return) at the end of the 8. Final Award was rendered by Dr. Anan Chantara-Opakorn (Dr. Chantara-
24th month following the full disbursement of the Sembcorp's equity Opakorn), the Sole Arbitrator appointed by the ICC. The dispositive portion
investment in WJNA and WJSC. They further agreed that the Guaranteed of the award reads:
Return shall be paid three (3) months from the completion of the special a. The Sole Arbitrator hereby decides that the Sole Arbitrator has jurisdiction
audits of WJSC and WJNA as per Article 13.3 of the Agreement. over the parties' dispute and directs [Mabuhay] to make the following
a. The Agreement included an arbitration clause, viz.: payments to [Sembcorp]:
i. Article XIX. APPLICABLE LAW; ARBITRATION 1. Half of the Guaranteed Return or an amount of
19.1 This Agreement and the validity and performance US$464,937.75 (Four Hundred Sixty-Four Thousand Nine
thereof shall be governed by the laws of the Republic of Hundred Thirty-Seven and Point Seventy-Five US Dollars);
2. Interest at the rate of 12% per annum on the said amount of
the Philippines.
US$464,937.75 calculated from the date of this Final Award
19.2 Any dispute, controversy or claim arising out of or until the said amount of US$464,937.75 is actually and
relating to this Agreement, or a breach thereof, other completely paid by [Mabuhay] to [Sembcorp]; and
than intra-corporate controversies, shall be finally 3. A reimbursement of half of the costs of arbitration fixed by
settled by arbitration in accordance with the rules of the ICC Court at US$57,000 or the aggregate half of which
conciliation and arbitration of the International Chamber amount to US$28,500 together with an interest at the rate of
of Commerce by one arbitrator with expertise in the 12% per annum calculated from the date of this Final Award
matter at issue appointed in accordance with said rules. until the said amount is actually and completely paid by
The arbitration proceeding including the rendering of the [Mabuhay] to [Sembcorp].
award shall take place in Singapore and shall be
conducted in the English Language. This arbitration shall 9. Consequently, Sembcorp filed a Petition for Recognition and Enforcement of
survive termination of this Agreement. Judgment upon the a Foreign Arbitral Award before the RTC of Makati City.
award rendered may be entered in any court having
jurisdiction or application may be made to such court for 10. Mabuhay filed an Opposition citing the following grounds for non-
a judicial acceptance of the award and an order of enforcement under Article V of the 1958 Convention on the Recognition and
enforcement, as the case may be. Enforcement of Foreign Arbitral Awards (New York Convention):
i. (1) the award deals with a conflict not falling within the
6. Sembcorp effected full payment of its equity investment. Special audits of terms of the submission to arbitration;
WJNA and WJSC were then carried out and completed. Said audits revealed ii. (2) the composition of the arbitral authority was not in
that WJSC and WJNA both incurred losses. accordance with the agreement of the parties; and
a. Sembcorp requested for the payment of its Guaranteed Return from iii. (3) recognition or enforcement of the award would be
Mabuhay and IDHI. contrary to the public policy of the Philippines.
b. Mabuhay admitted its liability but asserted that since the obligation
is joint, it is only liable for fifty percent (50%) of the claim or 11. Mabuhay argued that the dispute is an intra-corporate controversy, hence,
US$464,937.75. excluded from the scope of the arbitration clause in the Agreement.
a. It alleged that Sembcorp became the controlling stockholder of
IDHI by acquiring substantial shares of stocks through its nominee,
Mr. Pablo N. Sare (Sare).
 b. Mabuhay thus claimed that it has already been released from the 1. We deny the petition.
joint obligation with IDHI as Sembcorp assumed the risk of loss
when it acquired absolute ownership over the aforesaid shares. I. Governing Laws
c. Moreover, Mabuhay argued that the appointment of Dr. Chantara-
Opakorn was not in accordance with the arbitral clause as he did not 1. The arbitration proceedings between the parties herein were conducted in
have the expertise in the matter at issue, which involved application Singapore and the resulting Final Award was also rendered therein. As such,
of Philippine law. Finally, Mabuhay argued that the imposition of the Final Award is a "foreign arbitral award" or an award made in a
twelve percent (12%) interest from the date of the Final Award was country other than the Philippines.
contrary to the Philippine law and jurisprudence. a. The Philippines and Singapore are members of the Convention on
the Recognition and Enforcement of Foreign Arbitral Awards (New
12. RTC: dismissed the petition and ruled that final award is unenforceable. York Convention)
a. "simple contractual payment obligation" of Mabuhay and IDHI to i. The New York Convention aims to provide common
Sembcorp had been rescinded and modified by the merger or legislative standards for the recognition of arbitration
confusion of the person of IDHI into the person of Sembcorp. agreements and court recognition and enforcement of
b. As a result, said obligation was converted into an intra-corporate foreign and non-domestic arbitral awards. Thus, the New
matter. York Convention primarily governs the recognition and
c. this court cannot recognize the Arbitral Award because it was not enforcement of foreign arbitral awards by our courts.
the work of an expert as required under the agreement. a. as a member of the United Nations Commission in International
d. Finally, the payment obligation in interest of 12% per annum on the Trade Law (UNCITRAL), the Philippines also adopted the
US Dollar Amounts ($464,937.75 and $28,500) as ordered by the UNCITRAL Model Law (Model Law) as the governing law on
Sole Arbitrator is contrary to law and existing jurisprudence, hence international commercial arbitrations.
void. a. Hence, when the Congress enacted Republic Act No. 9285
or the Alternative Dispute Resolution Act of 2004 34
13. CA: reversed the RTC decision (ADR Act), it incorporated the Model Law in its entirety.
a. It recognized the Final Award and remanded the case to the RTC for
proper execution. 2. Sections 19 and 42 of the ADR Act expressly provided for the applicability
of the New York Convention and the Model Law in our jurisdiction109
ISSUE: Whether or not Mabuhay able to establish a ground for refusing the
enforcement of the Final Award under our applicable laws and jurisprudence on 3. In addition to our arbitration laws, our courts, in recognizing or enforcing a
arbitration—NO. The final award was rendered in compliance with the rules on foreign arbitral award, shall also take into consideration the laws applied by
arbitration the arbitral tribunal. These may comprise the substantive law of the contract
and the procedural rules or the rules governing the conduct of arbitration
RULING: WHEREFORE, the Petition is hereby DENIED. The November 19, 2013 proceedings.
Decision and the June 3, 2014 Resolution of the Court of Appeals in CA-G.R. CV
No. 92296 are AFFIRMED. 4. As agreed upon by the parties herein under the arbitral clause in their
Agreement, the substantive law of the contract is the Philippine law and the
RATIO: procedural rules are the ICC Rules.

is not made in any of the official languages, the party shall supply a duly certified translation thereof into
SEC. 42. Application of the New York Convention . — The New York Convention shall govern the any of such languages.
recognition and enforcement of arbitral awards covered by the said Convention.
The recognition and enforcement of such arbitral awards shall be filled (sic) with regional trial court in The applicant shall establish that the country in which foreign arbitration award was made is a party to
accordance with the rules of procedure to be promulgated by the Supreme Court. Said procedural rules the New York Convention.
shall provide that the party relying on the award or applying for its enforcement shall file with the court
the original or authenticated copy of the award and the arbitration agreement. If the award or agreement
 a. During the filing of the request for Arbitration, the ICC Rules in correcting an arbitral award may be appealed to the CA in
effect was the ICC Rules of Arbitration 1998. accordance with the rules of procedure to be promulgated
b. Considering that the essence of arbitration is party autonomy, the by the Supreme Court."
Court shall refer to the said Rules for purposes of examining the
procedural infirmities raised by the parties to the arbitration. 3. The Special ADR Rules shall retroactively apply to all pending cases
provided that no vested rights are impaired or prejudiced.
II. Jurisdiction a. In this case, Sembcorp filed a notice of appeal in accordance with
1. Mabuhay argues that the CA seriously erred in not dismissing outright the Section 2 of Rule 41 40 as it is the only applicable rule existing at
appeal of Sembcorp as it had no jurisdiction to act on the appeal. that time.
Mabuhay's argument hinges on Rule 19.12 of the Special ADR Rules, as b. Sembcorp had a vested right to due process in relying on the said
follows: rule. Consequently, the CA had jurisdiction to act on Sembcorp's
Rule 19.12. Appeal to the Court of Appeals . — An appeal to the appeal.
Court of Appeals through a petition for review under this Special
Rule shall only be allowed from the following final orders of the COURT’S JURISDICTION:
Regional Trial Court:
k. Refusing recognition and/or enforcement of a foreign arbitral 1. The Court's review of a CA Decision is discretionary and limited to specific
award; grounds provided under the Special ADR Rules110.

2. Mabuhay thus contends that filing a petition for review and not a notice of 2. In relation to the applicable standard or test for judicial review by the CA in
appeal is the proper remedy to contest the RTC's refusal to enforce the Final arriving at its decision, the Special ADR Rules further provide111
Award.
a. The Court notes, however, that the Special ADR Rules took effect 3. Here, Mabuhay did not specifically raise any of the grounds under Rule 19.36
in 2009. above in its petition before this Court. Nonetheless, considering the dearth of
b. Sembcorp's notice of appeal was filed only in 2008. The ADR Act, jurisprudence on enforcement of foreign arbitral awards and the fact that the
which was already in effect at that time, did not specify the proper CA reversed the RTC decision, the Court exercises its discretion to review
remedy of appeal from the RTC to the CA. the CA decision solely for purposes of determining whether the CA applied
i. It merely provides that "a decision of the regional trial court the aforecited standard of judicial review.
confirming, vacating, setting aside, modifying or

110
Rule 19.36. Review discretionary. — A review by the Supreme Court is not a matter of right, but of indicating with specificity the nature of such error or abuse of discretion and the serious prejudice
sound judicial discretion, which will be grantedonly for serious and compelling reasons resulting in grave suffered by the petitioner on account thereof, shall constitute sufficient ground for the Supreme Court to
prejudice to the aggrieved party. The following, while neither controlling nor fully measuring the court's dismiss outright the petition.
discretion, indicate the serious and compelling, and necessarily, restrictive nature of the grounds that will
warrant the exercise of the Supreme Court's discretionary powers, when the Court of Appeals: 111
Rule 19.20. Due course. — If upon the filing of a comment or such other pleading or documents as
a. Failed to apply the applicable standard or test for judicial review prescribed in these Special ADR
may be required or allowed by the Court of Appeals or upon the expiration of the period for the filing
Rules in arriving at its decision resulting in substantial prejudice to the aggrieved party;
thereof, and on the basis of the petition or the records, the Court of Appeals finds prima facie that the
b. Erred in upholding a final order or decision despite the lack of jurisdiction of the court that rendered
Regional Trial Court has committed an error that would warrant reversal or modification of the
such final order or decision;
judgment, final order, or resolution sought to be reviewed, it may give due course to the petition;
c. Failed to apply any provision, principle, policy or rule contained in these Special ADR Rules resulting
otherwise, it shall dismiss the same.
in substantial prejudice to the aggrieved party; and
Rule 19.24. Subject of appeal restricted in certain instance . — If the decision of the Regional Trial Court
d. Committed an error so egregious and harmful to a party as to amount to an undeniable excess of
refusing to recognize and/or enforce, vacating and/or setting aside an arbitral award is premised on a
jurisdiction.
finding of fact, the Court of Appeals may inquire only into such fact to determine the existence or non-
The mere fact that the petitioner disagrees with the Court of Appeals' determination of questions of fact, of
existence of the specific ground under the arbitration laws of the Philippines relied upon by the Regional
law or both questions of fact and law, shall not warrant the exercise of the Supreme Court's discretionary
Trial Court to refuse to recognize and/or enforce, vacate and/or set aside an award. Any such inquiry into
power. The error imputed to the Court of Appeals must be grounded upon any of the above prescribed
a question of fact shall not be resorted to for the purpose of substituting the court's judgment for that of the
grounds for review or be closely analogous thereto.
arbitral tribunal as regards the latter's ruling on the merits of the controversy
A mere general allegation that the Court of Appeals has committed serious and substantial error or that it
has acted with grave abuse of discretion resulting in substantial prejudice to the petitioner without
III. Grounds for Refusing Enforcement or Recognition Rules. The ICC, thus, is the appointing authority agreed upon
by the parties.
4. Our jurisdiction adopts a policy in favor of arbitration to achieve speedy and i. The "appointing authority" is the person or institution
impartial justice and declog court dockets. This pro- arbitration policy is named in the arbitration agreement as the appointing
further evidenced by the rule on presumption in favor of enforcement of a authority; or the regular arbitration institution under whose
foreign arbitral award under the Special ADR Rules112 rule the arbitration is agreed to be conducted.
ii. Where the parties have agreed to submit their dispute to
5. Under Article V of the New York Convention, the grounds for refusing institutional arbitration rules, and unless they have agreed
enforcement and recognition of a foreign arbitral award are: (See ANNEX to a different procedure, they shall be deemed to have
A) –Article V (1) (d) is relevant agreed to procedure under such arbitration rules for the
selection and appointment of arbitrators.
6. We find that Mabuhay failed to establish any of the grounds for refusing d. The pertinent rules in the ICC Arbitration Rules of 1998 provide that
enforcement and recognition of a foreign arbitral award. We discuss the the sole arbitrator or chairman of the Arbitral Tribunal shall be of a
grounds raised by Mabuhay: nationality other than those of the parties, and that the appointment
shall be upon proposal of the national committee.113
A. The arbitral authority, composed of Dr. Chatara-Opakorn as the sole
arbitrator, was constituted in accordance with the arbitration agreement . 7. In accordance with the aforecited rules, Dr. Chantara-Opakorn was appointed
upon the proposal of the Thai National Committee.
a. The first ground raised by Mabuhay is Article V (1) (d) of the New a. It bears stressing that the pro-arbitration policy of the State includes
York Convention, i.e., that the composition of the arbitral authority its policy to respect party autonomy.
was not in accordance with the agreement of the parties. Mabuhay b. Thus, Rule 2.3 of the Special ADR Rules provides that "the parties
and Sembcorp stipulated in their Agreement that the sole arbitrator are free to agree on the procedure to be followed in the conduct of
must have "expertise in the matter at issue." arbitral proceedings."
b. Since they also agreed that the validity and the performance of the
Agreement shall be governed by the Philippine law, Mabuhay 8. Moreover, under Rule 7.2 of the Special ADR Rules, a challenge to the
argues that the phrase "expertise in the matter at issue" necessarily appointment of an arbitrator may be raised in court only when the appointing
means expertise in the Philippine law. Dr. Chatara-Opakorn, a Thai authority fails or refuses to act on the challenge within such period as may be
national, does not possess any educational degree or training in allowed under the applicable rule or in the absence thereof, within thirty (30)
Philippine law. days from receipt of the request, that the aggrieved party may renew the
c. The Agreement provides, however, that the arbitrator with expertise challenge in court.
in the matter at issue shall be appointed in accordance with the ICC a. This is clearly not the case for Mabuhay as it was able to challenge
the appointment of Dr. Chantara- Opakorn in accordance with

113
112 Article 9 — Appointment and Confirmation of the Arbitrators
Rule 13.11. Court action . — It is presumed that a foreign arbitral award was made and released in
due course of arbitration and is subject to enforcement by the court.
3. Where the Court is to appoint a sole arbitrator or the chairman of an Arbitral Tribunal, it shall make
the appointment upon a proposal of a National Committee of the ICC that it considers to be appropriate.
The court shall recognize and enforce a foreign arbitral award unless a ground to refuse recognition or
If the Court does not accept the proposal made, or if the National Committee fails to make the proposal
enforcement of the foreign arbitral award under this rule is fully established.
requested within the time limit fixed by the Court, the Court may repeat its request or may request a
The decision of the court recognizing and enforcing a foreign arbitral award is immediately executory.
proposal from another National Committee that it considers to be appropriate.
In resolving the petition for recognition and enforcement of a foreign arbitral award in accordance with
5. The sole arbitrator or the chairman of the Arbitral Tribunal shall be of a nationality other than those of
these Special ADR Rules, the court shall either [a] recognize and/or enforce or [b] refuse to recognize
the parties. However, in suitable circumstances and provided that neither of the parties objects within the
and enforce the arbitral award. The court shall not disturb the arbitral tribunal's determination of facts
time limit fixed by the Court, the sole arbitrator or the chairman of the Arbitral Tribunal may be chosen
and/or interpretation of law.
from a country of which any of the parties is a national.
 Article 11 of the ICC Rules, but the ICC Court rejected the same. 48 action for registration of the shares transfer [sic] already transferred
As such, the Court shall not entertain any challenge to the from IDHI to the Claimant in the books of WJNA and WJSC.
appointment of arbitrator disguised as a ground for refusing i. The nature of the Claimant's claim is not intrinsically
enforcement of an award. connected with the regulation of the corporation. The
b. At any rate, Mabuhay's contention that the sole arbitrator must have Claimant's claim in this arbitration is straightforward:
the expertise on Philippine law fails to persuade. that the Respondent agreed, under a contract, to make
c. If the intent of the parties is to exclude foreign arbitrators due to the payment of certain amount of money to the Claimant
substantive law of the contract, they could have specified the same upon the occurrence of a specified event; that the said
considering that the ICC Rules provide for appointment of a sole event occurred but the Respondent refused to pay such
arbitrator whose nationality is other than those of the parties. amount of money to the Claimant; that the Claimant filed
the Request in order to enforce the payment.
B. The dispute is not an intra- corporate controversy, hence, included in the ii. Accordingly, the Sole Arbitrator is of the opinion that the
scope of disputes submitted to arbitration. dispute in this arbitration is not an intra-corporate
controversy, and, hence, it is not excluded from
1. Under Article V (1) (c) of the New York Convention, the court may refuse arbitration under Article 19.2 of the Shareholders'
enforcement of a foreign arbitral award when the award deals with a Agreement.
difference not contemplated by or not falling within the terms of the
submission to arbitration. Mabuhay argues that the dispute is an intra- 4. Again, the Special ADR Rules specifically provides that in resolving the
corporate controversy which is expressly excluded from the scope of disputes petition for recognition and enforcement of a foreign arbitral award, the court
submitted to arbitration under the Agreement. In essence, Mabuhay attacks shall not disturb the arbitral tribunal's determination of facts and/or
the jurisdiction of the arbitral tribunal to hear the dispute as it did not fall interpretation of law.
within the terms of submission to arbitration. a. Yet, the RTC, in its decision dismissing the petition of Sembcorp,
declared that "it is undisputed that the shares of stocks of IDHI in
2. The CA correctly applied the Kompetenz-Kompetenz principle expressly WJNA and WJSC were actually owned by [Sembcorp] before the
recognized under Rule 2.2 of the Special ADR Rules, viz.: filing of the request for arbitration" without providing any factual
a. The Special ADR Rules recognize the principle of competence- basis for such conclusion which directly contradicts the arbitral
competence, which means that the arbitral tribunal may initially rule tribunal's findings.
on its own jurisdiction, including any objections with respect to the b. Even granting that the court may rule on the issue of whether the
existence or validity of the arbitration agreement or any condition dispute is an intra-corporate controversy, Mabuhay's argument is
precedent to the filing of a request for arbitration. premised on the factual issue of whether Sembcorp indeed acquired
b. To recall, the Agreement provides that "(a)ny dispute, controversy the shares of IDHI. Mabuhay failed to establish such fact before the
or claim arising out of or relating to this Agreement, or breach arbitral tribunal.
thereof, other than intra-corporate controversies, shall be finally c. The RTC, on the other hand, concluded that Sembcorp acquired the
settled by arbitration. . ." subject shares but failed to explain the basis for such conclusion. In
the absence of sufficient evidence that Sembcorp acquired the shares
3. Among the issues settled in the Final Award is whether the dispute is an intra- of IDHI, the Court finds no cogent reason to disturb the arbitral
corporate controversy. Dr. Chantara-Opakorn ruled in the negative. The Final tribunal's ruling in favor of the latter's jurisdiction over the dispute.
award stated that there was no transfer of shares from IDHI to the claimant,
and that the transfer of shares from IDHI has not taken effect. C. Enforcement of the award would not be contrary to public policy of the
a. It is clear that the Claimant's claim is neither premised on allegations Philippines.
of mismanagement of WJNA and WJSC, nor on who manages or
controls or who has the right to manage or control WJNA and 5. Under Article V (2) (b) of the New York Convention, a court may refuse to
WJSC, nor is it a claim to effect the transfer of the share, nor an enforce an award if doing so would be contrary to the public policy of the
State in which enforcement is sought. Neither the New York Convention nor
 the mirroring provisions on public policy in the Model Law and Our
arbitration laws provide a definition of "public policy" or a standard for 1. Mabuhay contends that it entered into a joint venture, which is akin to a
determining what is contrary to public policy. particular partnership, with Sembcorp. Applying the laws on partnership, the
payment of the Guaranteed Return to Sembcorp is a violation of Article 1799
6. Most arbitral jurisdictions adopt a narrow and restrictive approach in defining 60 of the Civil Code, as it shields the latter from sharing in the losses of the
public policy pursuant to the pro-enforcement policy of the New York partnership. Ergo, enforcement of the Final Award would be contrary to
Convention. The public policy exception, thus, is "a safety valve to be used public policy as it upholds a void stipulation.
in those exceptional circumstances when it would be impossible for a legal a. The restrictive approach to public policy necessarily implies that not
system to recognize an award and enforce it without abandoning the very all violations of the law may be deemed contrary to public policy.
fundaments on which it is based."
a. An example of a narrow approach adopted by several jurisdictions 2. At any rate, Mabuhay's contention is bereft of merit.
is that the public policy defense may only be invoked "where a. The joint venture between Mabuhay, IDHI, and Sembcorp was
enforcement [of the award] would violate the forum state's most pursued under the Joint Venture Corporations, WJSC and WJNA.
basic notions of morality and justice." By choosing to adopt a corporate entity as the medium to pursue the
joint venture enterprise, the parties to the joint venture are bound by
7. In the Philippines, there is no definition of what public policy is in arbitration corporate law principles under which the entity must operate.
cases. But, in a case, it was held that, for purposes of declaring a contract b. Among these principles is the limited liability doctrine. The use of
void: a joint venture corporation allows the co-venturers to take full
a. “At any rate, courts should not rashly extend the rule which holds advantage of the limited liability feature of the corporate vehicle
that a contract is void as against public policy. It may be said, which is not present in a formal partnership arrangement. 63 In fine,
however, that, in general, a contract which is neither prohibited by Mabuhay's application of Article 1799 is erroneous.
law nor condemned by judicial decision, nor contrary to public
morals, contravenes no public policy. In the absence of express 3. On a final note, We implore the lower courts to apply the ADR Act and the
legislation or constitutional prohibition, a court, in order to declare Special ADR Rules accordingly. Arbitration, as a mode of alternative dispute
a contract void as against public policy, must find that the contract resolution, is undeniably one of the viable solutions to the longstanding
as to the consideration or thing to be done, has a tendency to injure problem of clogged court dockets. International arbitration, as the preferred
the public, is against the public good, or contravenes some mode of dispute resolution for foreign companies, would also attract foreign
established interests of society, or is inconsistent with sound policy investors to do business in the country that would ultimately boost Our
and good morals, or tends clearly to undermine the security of economy.
individual rights, whether of personal liability or of private a. In this light, We uphold the policies of the State favoring arbitration
property.” and enforcement of arbitral awards, and have due regard to the said
policies in the interpretation of Our arbitration laws.
8. The Court adopts the majority and narrow approach in determining whether
enforcement of an award is contrary to Our public policy. Mere errors in the
interpretation of the law or factual findings would not suffice to warrant
refusal of enforcement under the public policy ground. The illegality or ANNEX A:
immorality of the award must reach a certain threshold such that, enforcement
of the same would be against Our State's fundamental tenets of justice and Article V of NY Convention:
morality, or would blatantly be injurious to the public, or the interests of the 1. Recognition and enforcement of the award may be refused, at the request of the
society. party against whom it is invoked, only if that party furnishes to the competent
authority where the recognition and enforcement is sought, proof that:
Pertinent claims of Mabuhay in relation to public policy.
(a) The parties to the agreement referred to in article II were, under the law
i. Violation of partnership law applicable to them, under some incapacity, or the said agreement is not valid under
the law to which the parties have subjected it or, failing any indication thereon, under
the law of the country where the award was made; or

(b) The party against whom the award is invoked was not given proper notice of the
appointment of the arbitrator or of the arbitration proceedings or was otherwise
unable to present his case; or

(c) The award deals with a difference not contemplated by or not falling within the
terms of the submission to arbitration, or it contains decisions on matters beyond the
scope of the submission to arbitration, provided that, if the decisions on matters
submitted to arbitration can be separated from those not so submitted, that part of the
award which contains decisions on matters submitted to arbitration may be
recognized and enforced; or

(d) The composition of the arbitral authority or the arbitral procedure was not
in accordance with the agreement of the parties, or, failing such agreement, was
not in accordance with the law of the country where the arbitration took place;
or

(e) The award has not yet become binding on the parties, or has been set aside or
suspended by a competent authority of the country in which, or under the law of
which, that award was made.

2. Recognition and enforcement of an arbitral award may also be refused if the

competent authority in the country where recognition and enforcement is sought
finds that:
(a) The subject matter of the difference is not capable of settlement by arbitration
under the law of that country; or

(b) The recognition or enforcement of the award would be contrary to the

public policy of that country.
 019 Encarnacion v. Johnson (SIAPNO) line of cases, we have settled issues that directly or indirectly involve the above
July 11, 2018 | Jardaleza, J. | Constituional Prohibition on Aliens Owning Land constitutional provision. In this case, it is undisputed that Johnson is a
Canadian citizen. Johnson neither denied this, nor alleged that he became a
PETITIONER: MATEO ENCARNACION (DECEASED), SUBSTITUTED Filipino citizen. Being an alien, he is absolutely prohibited from acquiring
BY HIS HEIRS, NAMELY: ELSA DEPLIAN-ENCARNACION, KRIZZA private and public lands in the Philippines. Concomitantly, respondent is also
MARIE D. ENCARNACION, LORETA ENCARNACION, CARMELITA E. prohibited from participating in the execution sale, which has for its object, the
STADERMAN, CORAZON S. ENCARNACION, RIZALINA transfer of ownership and title of property to the highest bidder. What cannot be
ENCARNACION-PARONG, VICTORIA ENCARNACION-DULA, MARIA legally done directly cannot be done indirectly
HELEN ENCARNACION-DAY, TERESITA ENCARNACION-MANALANG,
GEORGE ENCARNACION, MARY MITCHIE E. EDWARDSON, ERNESTO DOCTRINE: The rule is clear and inflexible: aliens are absolutely not allowed to
ENCARNACION, MATEO ENCARNACION, JR., AND GRACE WAGNER acquire public or private lands in the Philippines, save only in constitutionally
RESPONDENTS: Thomas Johnson recognized exceptions. There is no rule more settled than this constitutional
prohibition, as more and more aliens attempt to circumvent the provision by trying
SUMMARY: Thomas Johnson filed an action for breach of contract with prayer to own lands through another.
for damages and costs against spouses Narvin Edwarson (Narvin) and Mary
Mitchie Edwarson (Mary), Mateo's daughter, before the Vancouver Registry of FACTS:
the SC of British Columbia, Canada. The SC of British Columbia issued a 1. Thomas Johnson filed an action for breach of contract with prayer for
Mareva injunction and authorized Johnson, among others, to obtain orders in damages and costs against spouses Narvin Edwarson (Narvin) and Mary
foreign jurisdictions which would permit its enforcement in those jurisdictions. Mitchie Edwarson (also known as Mary Encarnacion; hereinafter shall be
Thereafter, the Supreme Court of British Columbia issued a Default Judgement referred to as Mary), Mateo's daughter, before the Vancouver Registry of the
finding Narvin and Mary liable to Johnson. Subsequently, Johnson filed an Supreme Court of British Columbia, Canada. The Supreme Court of British
action for recognition and enforcement of foreign judgment with prayer for the Columbia issued a Mareva injunction and authorized Johnson, among others,
recognition of the Mareva injunction with RTC of Olongapo City. RTC issued to obtain orders in foreign jurisdictions which would permit its enforcement
an Order restraining Narvin and Mary from disposing or encumbering their in those jurisdictions. Thereafter, the Supreme Court of British Columbia
assets including those belonging to Mateo. Despite publication, Narvin and issued a Default Judgement finding Narvin and Mary liable to Johnson.
Mary still failed to file their answer. Accordingly, the RTC declared them in 2. Subsequently, Johnson filed an action for recognition and enforcement of
default, and subsequently rendered a judgment in default in accordance with the foreign judgment with prayer for the recognition of the Mareva injunction
judgment of the SC of British Columbia. A writ of execution was issued and was with Branch 72 of the RTC of Olongapo City, docketed as Civil Case No.
amended to include the properties under the name of Mateo whose title and tax 110-0-2003.
declarations were previously annotated. Well along, Johnson filed a motion for 3. The RTC issued an Order restraining Narvin and Mary from disposing or
clarificatory order seeking further amendment of the writ of execution to encumbering their assets, as well as those belonging to, or controlled by, the
expressly authorize the levy of the properties in the name of Mateo whose title Zambales-Canada Foundation, the 5-E Foundation, and those belonging to
and tax declarations were previously annotated. 2 years after the issuance of the Mateo (for being properties transferred in fraud of creditors). In addition, the
amended writ of execution, Mateo filed a petition for annulment of judgement RTC ordered the Register of Deeds of Zambales and the Provincial Assessor
before the CA. He alleged that he is the owner of 18 properties levied. Mateo to annotate its restraining order on the titles and tax declarations of all
died during the pendency of the proceedings before the CA. his heirs amended properties owned by Narvin and Mary, as well as those belonging to Mateo.
their argument to aver that all the proceedings in Civil Case No. 110-0-2003 Thereafter, the RTC ordered the service of summonses by publication upon
should be annulled on the ground of lack of jurisdiction and extrinsic fraud. CA Narvin and Mary. Despite publication, Narvin and Mary still failed to file
denied their petition. ISSUE: Whether an alien may own private lands by virtue their answer. Accordingly, the RTC declared them in default, and
of an execution sale. RULING: No. [DOCTRINE] Section 7, Article XII of the subsequently rendered a judgment in default in accordance with the judgment
Constitution states: Sec. 7. Save in cases of hereditary succession, no private of the Supreme Court of British Columbia.
lands shall be transferred or conveyed except to individuals, corporations, or 4. A writ of execution was issued and was amended to include the properties
associations qualified to acquire or hold lands of the public domain. In a long under the name of Mateo whose title and tax declarations were previously
 annotated. Well along, Johnson filed a motion for clarificatory order seeking (4) recognized a global injunction issued by a foreign court as a writ of
further amendment of the writ of execution to expressly authorize the levy of attachment; (5) promulgated a final order without requiring the presentation
the properties in the name of Mateo whose title and tax declarations were of evidence, even ex parte, and without distinctly stating the facts and the law
previously annotated. on which it is based; (6) allowed the levy on execution of properties
5. Two years after the issuance of the amended writ of execution, Mateo filed a belonging to a party who was not named as defendant in the civil action; and
petition for annulment of judgement before the CA. He alleged that he is the (7) allowed the sale and delivery of the properties to a foreigner who is
owner of 18 properties levied in Civil Case No. 110-0-2003; that he was not disqualified from owning private lands under the Constitution.44
made a party to the case; and that the inclusion of his properties in the levy
and execution sale were made without notice to him. Mateo, nonetheless, ISSUE/s:
admitted before the CA that he has no standing to question the proceedings 1. Whether an action for annulment of judgment is the proper remedy of a third-
on the action for recognition and enforcement of judgment. He asserts that he party claimant of properties levied and sold under execution sale; and
is only questioning the amended writ of execution which deprived him of his 2. Whether respondent, an alien, may own private lands by virtue of an
properties. execution sale (IMPT)
6. Sadly, Mateo died during the pendency of the proceedings before the CA. his
heirs amended their argument to aver that all the proceedings in Civil Case RULING: We deny the petition. Nevertheless, we nullify the sale of the private
No. 110-0-2003 should be annulled on the ground of lack of jurisdiction and lands to respondent for being a flagrant violation of Section 7, Article XII of the
extrinsic fraud. Constitution. We thus remand the case back to Branch 72 of the RTC of Olongapo
7. During the pendency of the proceedings before the CA, Mateo died and was City, to conduct anew the auction sale of the levied properties, and to exclude
substituted by his heirs (petitioners), including his daughter Mary (Mary respondent from participating as bidder.
et al.). In their Memorandum, Mary et al. amended their argument to aver
that all the proceedings in Civil Case No. 110-0-2003 should be annulled on RATIO:
the ground of lack of jurisdiction and extrinsic fraud. Proper Recourse is file a separate action under Sec 16 Rule 39
8. CA denied the petition and upheld the jurisdiction of the RTC over the action 1. The Court ruled in this wise “The proper party to file a petition for annulment of
of recognition of foreign judgment. By filing an Affidavit of Third Party judgment or final order need not be a party to the judgment sought to be annulled.
Claim, Mateo was deemed to have voluntarily submitted himself to the Nevertheless, it is essential that he is able to prove by preponderance of evidence
jurisdiction of the RTC. It also ruled that the remedy of annulment of that he is adversely affected by the judgment. A person not adversely affected by
judgment is not proper because the February 17, 2005 Order is not a final a decision in the civil action or proceeding cannot bring an action for annulment
order as it merely seeks to clarify the RTC's further amended writ of of judgment under Rule 47 of the Rules of Court. The exception is if he is a
execution; the proper remedy is to move to quash the writ of execution and if successor in interest by title subsequent to the commencement of the action, or if
unsuccessful, to file a petition for certiorari under Rule 65 of the Rules of the action or proceeding is in rem, in which case the judgment is binding against
Court. CA also said that even if procedural rules were relaxed, the petition him.”
would still fail because it has already been barred by estoppel and laches due 2. Thus, the Court held that “Considering the foregoing, Mateo is not a party who
to Mateo's delay in filing the petition despite numerous opportunities to do could be adversely affected by the outcome of Civil Case No. 110-0-2003. To
so. Lastly, the CA pointed out that Mateo is not the proper party to file the begin with, he was not an indispensable party to the action for recognition whose
petition, as he had already transferred the properties to Mary by virtue of a interest in the controversy is such that a final decree will necessarily affect his
deed of quitclaim on February 27, 1995 rights, as he was not the judgment debtor in the action. Neither is Mateo a real
9. CA denied petitioners' MR. Hence, this petition. party in interest in Civil Case No. 110-0-2003, as aptly noted by the CA, having
10. Mary et al. reiterate their arguments before the CA that the whole proceedings already transferred his interest in the properties to Mary. Lastly, he is not a
in Civil Case No. 110-0-2003 be annulled on grounds of lack of jurisdiction successor in interest of Narvin and Mary.”
and extrinsic fraud because the RTC: (1) allowed respondent to sue as an 3. Furthermore, the Court ruled that “In this case, the proper recourse for petitioners
indigent party when he is willing and able to put up a bond that may be is to vindicate and prove their ownership over the properties in a separate action
required by the court; (2) allowed a complaint with a grossly defective as allowed under Section 16, Rule 39 of the Rules of Court. This is the more
certification against forum shopping; (3) allowed service of summons by prudent action since respondent also asserts that the properties claimed were
publication in an action in personam and exercised jurisdiction on that basis; owned by Mary, and the CA upheld such assertion. At this juncture, we note that
 if we grant the petition, we would be nullifying the whole proceeding in Civil from the estate of Felix Ting Ho, precisely because he never became the
Case No. 110-0-2003 which is more than what is necessary to address the remedy owner thereof in light of the above-mentioned constitutional prohibition.
being sought by petitioners. 6. Muller v. Muller: petitioner and respondent were married in Germany.
During the subsistence of their marriage, respondent purchased a parcel of
Johnson, being an alien, is absolutely prohibited from acquiring private and public land in Antipolo City and constructed a house thereon. The Antipolo property
lands in the Philippines was registered in the name of the petitioner. They eventually separated,
1. While mindful of our ruling that petitioners cannot file the petition for prompting the respondent to file a petition for separation of property.
annulment of judgment, we nevertheless cannot turn a blind eye to the blatant Specifically, respondent prayed for reimbursement of the funds he paid for
violation of the Constitution's prohibition on foreign ownership of lands. This the acquisition of said property. In deciding the case in favor of the petitioner,
violation was committed when respondent was allowed to participate in the the Court held that respondent was aware that as an alien, he was prohibited
public auction sales where, as highest bidder, he acquired land. from owning a parcel of land situated in the Philippines. He had, in fact,
2. Section 7, Article XII of the Constitution states: Sec. 7. Save in cases of declared that when the spouses acquired the Antipolo property, he had it titled
hereditary succession, no private lands shall be transferred or conveyed in the name of the petitioner because of said prohibition. Hence, we denied
except to individuals, corporations, or associations qualified to acquire or his attempt at subsequently asserting a right to the said property in the form
hold lands of the public domain. of a claim for reimbursement. Neither did the Court declare that an implied
3. The fundamental law is clear that aliens, whether individuals or corporations, trust was created by operation of law in view of petitioner's marriage to
are disqualified from acquiring lands of the public domain. The right to respondent. We said that to rule otherwise would permit circumvention of the
acquire lands of the public domain is reserved only to Filipino citizens or constitutional prohibition.
corporations at least 60% of the capital of which is owned by 7. Frenzel v. Catito: petitioner, an Australian citizen, was married to respondent,
Filipinos.69Consequently, they are also disqualified from acquiring private a Filipina, was married to Klaus Muller. Petitioner and respondent met and
lands. later cohabited in a common-law relationship, during which petitioner
4. Matthews v. Taylor: we took cognizance of the violation of the Constitutional acquired real properties; and since he was disqualified from owning lands in
prohibition on alien land ownership despite the failure of the trial and the Philippines, respondent's name appeared as the vendee in the deeds of
appellate courts to consider and apply these constitutional principles. There sale. Again, as in the other cases, the Court refused to declare petitioner as
we said, "the trial and appellate courts both focused on the property relations the owner mainly because of the constitutional prohibition. The Court added
of petitioner and respondent in light of the Civil Code and Family Code that being a party to an illegal contract, he could not come to court and ask to
provisions. They, however, failed to observe the applicable constitutional have his illegal objective carried out. One who loses his money or property
principles, which, in fact, are the more decisive." The rule is clear and by knowingly engaging in an illegal contract may not maintain an action for
inflexible: aliens are absolutely not allowed to acquire public or private his losses.
lands in the Philippines, save only in constitutionally recognized 8. Cheesman v. Intermediate Appellate Court: petitioner (an American citizen)
exceptions. There is no rule more settled than this constitutional prohibition, and Criselda Cheesman acquired a parcel of land that was later registered in
as more and more aliens attempt to circumvent the provision by trying to own the latter's name. Criselda subsequently sold the land to a third person without
lands through another. In a long line of cases, we have settled issues that the knowledge of the petitioner. The petitioner then sought the nullification
directly or indirectly involve the above constitutional provision. We had of the sale as he did not give his consent thereto. The Court held that assuming
cases where aliens wanted that a particular property be declared as part of that it was petitioner's intention that the lot in question be purchased by him
their father's estate; that they be reimbursed the funds used in purchasing a and his wife, he acquired no right whatever over the property by virtue of that
property titled in the name of another; that an implied trust be declared in purchase; and in attempting to acquire a right or interest in land, vicariously
their (aliens') favor; and that a contract of sale be nullified for their lack of and clandestinely, he knowingly violated the Constitution; thus, the sale as to
consent. him was null and void.
5. Ting Ho, Jr. v. Teng Gui: Felix Ting Ho, a Chinese citizen, acquired a parcel 9. Hulst v. PR Builders, Inc: Before resolving the question of whether the CA
of land, together with the improvements thereon. Upon his death, his heirs erred in affirming the Order of the HLURB setting aside the levy made by
(petitioners) claimed the properties as part of the estate, and sought the the sheriff, it behooves this Court to address a matter of public and national
partition of said properties. SC excluded the land and improvements thereon importance which completely escaped the attention of the HLURB Arbiter
and the CA: petitioner and his wife are foreign nationals who are disqualified
 under the Constitution from owning real property in their names. SC took
cognizance of the violation of the Constitution that escaped both the HLURB
and the CA. Contract to sell was void.
10. In this case, it is undisputed that Johnson is a Canadian citizen. Johnson
neither denied this, nor alleged that he became a Filipino citizen. Being an
alien, he is absolutely prohibited from acquiring private and public lands
in the Philippines. Concomitantly, respondent is also prohibited from
participating in the execution sale, which has for its object, the transfer of
ownership and title of property to the highest bidder. What cannot be legally
done directly cannot be done indirectly.
11. In light of this, SC nullified the auction sales where Johnson was declared
the highest bidder, as well as the proceedings which led to the acquisition of
ownership by respondent over the lands involved. Article 1409(1) and (7) of
the Civil Code states that all contracts whose cause, object, or purpose is
contrary to law or public policy, and those expressly prohibited or declared
void by law are inexistent and void from the beginning.
 020 JUEGO-SAKAI v. REPUBLIC (TIMBOL) a certificate issued by the proper diplomatic or consular officer in the Philippine
July 23, 2018 | Peralta, J. | Recognition and Enforcement of Judgment (Divorce)
foreign service stationed in the foreign country in which the record is kept and
(b) authenticated by the seal of his office
PETITIONER: Stephen I. Juego-Sakai
RESPONDENTS: Republic of the Philippines

SUMMARY: Stephen Juego-Sakai and Toshiharu Sakai got married in Japan. FACTS:
After 2 years, the parties, by agreement, obtained a divorce decree. Juego-Sakai, 71. Stephen I. Juego-Sakai and Toshiharu Sakai got married on August 11, 2000
thereafter, filed a Petition for Judicial Recognition of Foreign Judgment before in Japan pursuant to the wedding rites therein
the RTC, which was granted and affirmed by the CA. However, the CA reversed 72. After 2 years, the parties, by agreement, obtained a divorce decree in said
its findings, ruling that the divorce decree cannot be recognized because it was country dissolving their marriage
obtained by agreement, that it was Juego-Sakai, a Filipino citizen, who obtained 73. Juego-Sakai filed a Petition for Judicial Recognition of Foreign Judgment
the divorce, and that Juego-Sakai failed to present authenticated copies of the before the RTC, Br. 40, Camarines Norte
Civil Code of Japan. Hence, Juego-Sakai contends that the divorce decree was a. The RTC granted the petition and recognized the divorce between
validly obtained, because the divorce decree by agreement was the practical type the parties as valid and effective under Philippines laws
of divorce in Japan, that consent to divorce does not remove the application of b. The CA affirmed
Art. 26 of the Family Code, and that there was substantial compliance in 74. On March 3, 2016, however the CA revisited its findings and recalled and set
presenting the Civil Code of Japan. aside its previous decision
a. According to the CA, the second of the following requisites under
The issue before the Court is whether or not the divorce decree is valid and should Art. 26 of the Family Code is missing:
be recognized in the Philippines. i. There is a valid marriage that has been celebrated between
a Filipino citizen and a foreigner; and
The SC held that the divorce decree was validly obtained, but the same cannot be ii. A divorce is obtained abroad by the alien spouse
recognized in the Philippines, because Juego-Sakai failed to present the pertinent capacitating him or her to remarry
laws of Japan regarding divorce. With regard to the divorce decree, the issue has b. This is because the divorce herein was consensual in nature,
been resolved in the prevailing jurisprudence of Republic v. Manalo, which held obtained by agreement of the parties, and not by Juego-Sakai alone
that there should be no distinction as to who initiated the divorce proceedings, 75. Thus, since Juego-Sakai, a Filipino citizen, also obtained the divorce herein,
lest it leave the Filipino citizen in an absurd situation allowing the alien to said divorce cannot be recognized in the Philippines
remarry, while the Filipino is still considered married in the Philippines. 76. In addition, the CA ruled that Juego-Sakai’s failure to present
authenticated copies of the Civil Code of Japan was fatal to her cause
Nevertheless, although the divorce decree was proven to be validly obtained by 77. Petitioner Juego-Sakai contends:
Juego-Sakai, the same cannot yet be recognized in the Philippines. Courts cannot a. That the divorce she obtained with her husband, designated as
take judicial notice of foreign laws, thus, the authenticity must be proven as facts, Divorce by Agreement in Japan, opposed to Judicial Divorce, is the
together with the alien’s applicable national law. (See Doctrine). Therefore, since more practical and common type of divorce in Japan
the divorce decree is not disputed, what is yet to be proven is the relevant laws on b. That it is to her great disadvantage if said divorce is not recognized
divorce of japan. and instead, Judicial Divorce is required in order for her to avail of
the benefit under the second paragraph of Art. 26 of the Family
DOCTRINE: Since both the foreign divorce decree and the national law of the Code, since their divorce had already been granted abroad
alien, recognizing his or her capacity to obtain a divorce, purport to be official c. That the mere fact she consented to the divorce does not prevent the
acts of a sovereign authority, Section 24 of Rule 132 of the Rules of Court applies application of Art. 26 for said provision does not state that where
Thus, what is required is proof, either by (1) official publications or (2) copies the consent of the Filipino spouse was obtained in the divorce, the
same no longer finds application
attested by the officer having legal custody of the document. If the copies of
d. That based on Republic v. Orbecido III, a Filipino spouse is allowed
official records are not kept in the Philippines, these must be (a) accompanied by to remarry in the event that he or she is divorced by a Filipino spouse
 who had acquired foreign citizenship divorce proceeding must actually be initiated by the alien spouse
e. That the reason why she was unable to present authenticated would depart from the true intent of the legislature and would
copies of the provisions of the Civil Code of Japan relative to otherwise yield conclusions inconsistent with the general purpose of
divorce is because she was unable to go to Japan due to the fact Par (2) of Art. 26, which is, specifically, to avoid the absurd situation
that she was pregnant where the Filipino spouse remains married to the alien spouse who,
i. None of her friends could obtain a copy of the same for after a foreign divorce decree that is effective in the country where
her it was rendered, is no longer married to the Filipino spouse
ii. Instead, she went to the library of the Japanese c. The subject provision, therefore, should not make a distinction for a
Embassy to photocopy the Civil Code Filipino who initiated a foreign divorce proceeding is in the same
iii. There she was issued a document which states that place and in like circumstance as a Filipino who is at the receiving
diplomatic missions of Japan overseas do not issue end of an alien-initiated proceeding
certified true copies of Japanese Law nor process 33. The Court similarly rules that despite the fact that Juego-Sakai participated
translation certificates of Japanese Law due to the in the divorce proceedings in Japan, and even if it is assumed that she initiated
potential problem in the legal interpretation thereof the same, she must still be allowed to benefit from the exception provided
iv. Thus, substantial compliance under Par (2) of Art. 26
a. Consequently, since her marriage to Toshiharu Sakai had already
ISSUE/s: been dissolved by virtue of the divorce decree they obtained in
4. WoN the Divorce Decree should be recognized – NO. Although Juego-Sakai Japan, thereby capacitating Toshiharu to remarry, Juego-Sakai shall
was able to prove that the divorce decree was validly obtained abroad, the likewise have capacity to remarry under Philippine Law
pertinent laws on divorce of Japan should still be proven, because the Courts
cannot take judicial notice of foreign laws Divorce Decree cannot be recognized
1. Nevertheless, we cannot yet grant Juego-Sakai’s Petition for Judicial
RULING: WHEREFORE, premises considered, the instant petition is GRANTED. Recognition of Foreign Judgment for she has yet to comply with certain
The assailed Amended Decision dated March 3, 2016 of the Court of Appeals in CA- guidelines before our courts may recognize the subject divorce decree and
G.R. CV No. 104253 is REVERSED and SET ASIDE. The case is REMANDED to the effects thereof
2. The Court has held that the starting point in any recognition of a foreign
the court of origin for further proceedings and reception of evidence as to the relevant
divorce judgment is the acknowledgement that our courts do not take judicial
Japanese law on divorce. notice of foreign judgments and laws
a. This means that the foreign judgment and its authenticity must
RATIO: be proven as facts under our rules on evidence, together with
the alien’s applicable national law to show the effect of the
Divorce Decree is validly obtained judgment on the alien himself or herself
32. The issue before the Court has already been resolved in the landmark ruling 3. Since both the foreign divorce decree and the national law of the alien,
of Republic v. Manalo, the facts of which fall squarely on point with the facts recognizing his or her capacity to obtain a divorce, purport to be official acts
herein of a sovereign authority, Section 24 of Rule 132 of the Rules of Court applies
a. The Court held that the fact that it was the Filipino spouse who 4. Thus, what is required is proof, either by (1) official publications or (2)
initiated the proceeding wherein the divorce decree was granted copies attested by the officer having legal custody of the documents
should not affect the application nor remove him from the coverage a. If the copies of official records are not kept in the Philippines,
of Par (2) of Art. 26 of the Family Code which states that “where a these must be (a) accompanied by a certificate issued by the
marriage between a Filipino citizen and a foreigner is validly proper diplomatic or consular officer in the Philippine foreign
celebrated and a divorce is thereafter validly obtained abroad by the service stationed in the foreign country in which the record is
alien spouse capacitating him or her to remarry, the Filipino spouse kept and (b) authenticated by the seal of his office
shall likewise have capacity to remarry under Philippine law” 5. In the instant case, the OSG does not dispute the existence of the divorce
b. We observed that to interpret the word “obtained” to mean that the decree, rendering the same admissible
a. What remains to be proven, therefore, is the pertinent Japanese
Law on divorce considering that Japanese laws on persons and
family relations are not among those matters that Filipino
judges are supposed to know by reason of their judicial function
 021 PANAVISION INTL v. TOEPPEN (CHIQUI) 9. Every web page has its own web site, which is its address, similar to a
April 17, 1998 | US Court of Appeals, 9th Circuit | Cyber-era telephone number or street address. Every web site on the Internet has an
identifier called a “domain name.” The domain name often consists of a
PETITIONER: Panavision International, L.P., a Delaware Limited Partnership person's name or a company's name or trademark.
RESPONDENT: Dennis Toeppen; Network Solutions, Inc., a District of Columbia 10. Domain names with the .com designation must be registered on the Internet
Corporation with Network Solutions, Inc. (“NSI”). NSI registers names on a first-come,
first-served basis for a $100 registration fee. NSI does not make a
SUMMARY: Panavision holds registered trademarks to the names “Panavision” and
“Panaflex” in connection with motion picture camera equipment. Panavision now
determination about a registrant's right to use a domain name.
wants to register a web site with the domain name Panavision.com but it could not 11. However, NSI does require an applicant to represent and warrant as an
do so since Toeppen already registered the domain name and the site contains express condition of registering a domain name that
photos of Pana, Illinois. Panavision’s counsel sent a letter to Toeppen asking the a. the applicant's statements are true and the applicant has the right to
latter to stop using the trademark and domain name. Toeppen then offered to settle use the requested domain name;
if Panavision would pay him $13,000 in exchange for the domain name. After b. the “use or registration of the domain name does not interfere with
Panavision refused, Toeppen registered the other trademark “Panaflex”. Panavision or infringe the rights of any third party in any jurisdiction with
filed this case in California and won. Toeppel appealed. respect to trademark, service mark, trade name, company name or
any other intellectual property right”; and
W/N the district court has personal jurisdiction over Toeppen – YES, all of the requirements c. the applicant is not seeking to use the domain name for any unlawful
for the exercise of specific, personal jurisdiction are satisfied. (check doctrine) (A) Toeppen purpose, including unfair competition.
engaged in a scheme to register Panavision's trademarks as his domain names for the purpose 12. Panavision holds registered trademarks to the names “Panavision” and
of extorting money from Panavision. His conduct, as he knew it likely would, had the effect
of injuring Panavision in California where Panavision has its principal place of business and
“Panaflex” in connection with motion picture camera equipment. Panavision
where the movie and television industry is centered. Under the “effects test,” the purposeful promotes its trademarks through motion picture and television credits and
availment requirement necessary for specific, personal jurisdiction is satisfied. (B) Toeppen's other media advertising.
registration of Panavision's trademarks as his own domain names on the Internet had the effect 13. In December 1995, Panavision attempted to register a web site on the Internet
of injuring Panavision in California. But for Toeppen's conduct, this injury would not have with the domain name Panavision.com. It could not do that, however, because
occurred. Panavision's claims arise out of Toeppen's California-related activities. (C) In Toeppen had already established a web site using Panavision's trademark as
balancing the Burger King factors (check Ratio #14), we conclude that although some factors his domain name. Toeppen's web page for this site displayed photographs of
weigh in Toeppen's favor, he failed to present a compelling case that the district court's the City of Pana, Illinois.
exercise of jurisdiction in California would be unreasonable. 14. On December 20, 1995, Panavision's counsel sent a letter from California to
Toeppen in Illinois informing him that Panavision held a trademark in the
W/N Toeppen is liable for the commercial use of the Panavision.com – YES, Toeppen's name Panavision and telling him to stop using that trademark and the domain
“business” is to register trademarks as domain names and then sell them to the rightful name Panavision.com. Toeppen responded by mail to Panavision in
trademark owners. He “act[s] as a ‘spoiler,’ preventing Panavision and others from doing
California, stating he had the right to use the name Panavision.com on the
business on the Internet under their trademarked names unless they pay his fee.” This is a
commercial use. Internet as his domain name.
a. Toeppen stated: If your attorney has advised you otherwise, he is
trying to screw you. He wants to blaze new trails in the legal frontier
DOCTRINE: In specific jurisdiction, we apply a three-part test to determine if a district court
may exercise specific jurisdiction: (a)The nonresident defendant must do some act or at your expense. Why do you want to fund your attorney's purchase
consummate some transaction with the forum or perform some act by which he purposefully of a new boat (or whatever) when you can facilitate the acquisition
avails himself of the privilege of conducting activities in the forum, thereby invoking the of ‘PanaVision.com’ cheaply and simply instead?
benefits and protections of its laws; (b) the claim must be one which arises out of or results b. Toeppen then offered to “settle the matter” if Panavision would pay
from the defendant's forum-related activities; and (c) exercise of jurisdiction must be him $13,000 in exchange for the domain name. Additionally,
reasonable. Toeppen stated that if Panavision agreed to his offer, he would not
“acquire any other Internet addresses which are alleged by
FACTS: (You make skip to Fact #4. Added the details in case Ma’am asks) Panavision Corporation to be its property.”
 15. After Panavision refused Toeppen's demand, he registered Panavision's other district court sits. California's long-arm statute permits a court to exercise
trademark with NSI as the domain name Panaflex.com. Toeppen's web page personal jurisdiction over a defendant to the extent permitted by the Due
for Panaflex.com simply displays the word “Hello.” Process Clause of the Constitution. The issue we address, therefore, is
16. Toeppen has registered domain names for various other companies including whether the requirements of due process are satisfied by the district court's
Delta Airlines, Neiman Marcus, Eddie Bauer, Lufthansa, and over 100 other exercise of personal jurisdiction over Toeppen.
marks. Toeppen has attempted to “sell” domain names for other trademarks 6. Personal jurisdiction may be founded on either general jurisdiction or specific
such as intermatic.com to Intermatic, Inc. for $10,000 and jurisdiction.
americanstandard.com to American Standard, Inc. for $15,000. 7. General jurisdiction exists when a defendant is domiciled in the forum
17. Panavision filed this action against Toeppen in the District Court for the state or his activities there are “substantial” or “continuous and
Central District of California. Panavision alleged claims for dilution of its systematic.” The district court correctly concluded that it did not have
trademark under the Federal Trademark Dilution Act of 1995, 15 U.S.C. § general jurisdiction over Toeppen. Toeppen is domiciled in Illinois and
1125(c), and under the California Anti-dilution statute, California Business his activities in California are not substantial or continuous and
and Professions Code § 14330. systematic.
a. Panavision alleged that Toeppen was in the business of stealing 8. In specific jurisdiction, we apply a three-part test to determine if a
trademarks, registering them as domain names on the Internet and district court may exercise specific jurisdiction:
then selling the domain names to the rightful trademark owners. a. The nonresident defendant must do some act or consummate
18. The district court determined it had personal jurisdiction over Toeppen, and some transaction with the forum or perform some act by which
granted summary judgment in favor of Panavision on both its federal and he purposefully avails himself of the privilege of conducting
state dilution claims. Toeppen then appealed. activities in the forum, thereby invoking the benefits and
protections of its laws;
ISSUE/s: b. the claim must be one which arises out of or results from the
3. W/N the district court has personal jurisdiction over Toeppen – YES, all of defendant's forum-related activities; and
the requirements for the exercise of specific, personal jurisdiction are c. exercise of jurisdiction must be reasonable.
satisfied.
4. W/N Toeppen is liable for the commercial use of the Panavision.com – YES, Purposeful availment
Toeppen “business” is to register trademarks as domain names and then sell
them to the rightful trademark owners. 9. The purposeful availment requirement ensures that a nonresident defendant
will not be haled into court based upon “random, fortuitous or attenuated”
RULING: Toeppen engaged in a scheme to register Panavision's trademarks as his contacts with the forum state. This requirement is satisfied if the defendant
domain names on the Internet and then to extort money from Panavision by trading on “has taken deliberate action” toward the forum state. It is not required that a
the value of those names. Toeppen's actions were aimed at Panavision in California defendant be physically present or have physical contacts with the forum, so
and the brunt of the harm was felt in California. The district court properly exercised long as his efforts are “purposefully directed” toward forum residents.
personal jurisdiction over Toeppen. We also affirm the district court's summary 10. Applying principles of personal jurisdiction to conduct in cyberspace is
judgment in favor of Panavision under the Federal Trademark Dilution Act, 15 U.S.C. relatively new. “With this global revolution looming on the horizon, the
§ 1125(c), and the California Anti-dilution statute, Cal.Bus. & Prof.Code § 14330. development of the law concerning the permissible scope of personal
Toeppen made commercial use of Panavision's trademarks and his conduct diluted jurisdiction based on Internet use is in its infant stages. The cases are scant.”
those marks. We have, however, recently addressed the personal availment aspect of
personal jurisdiction in a case involving the Internet.
RATIO: a. In Cybersell, an Arizona corporation, Cybersell, Inc. (“Cybersell
Personal Jurisdiction AZ”), held a registered servicemark for the name Cybersell. A
Florida corporation, Cybersell, Inc. (“Cybersell FL”), created a web
site with the domain name cybsell.com. The web page had the word
5. There is no applicable federal statute governing personal jurisdiction in this
“Cybersell” at the top and the phrase, “Welcome to Cybersell!”
case. Accordingly, we apply the law of California, the state in which the
Cybersell AZ claimed that Cybersell FL infringed its registered
 trademark and brought an action in the district court in Arizona. We was a Delaware limited partnership, its principal place of business was in
held the Arizona court could not exercise personal jurisdiction over California, and the heart of the theatrical motion picture and television
Cybersell FL, because it had no contacts with Arizona other than industry is located there.
maintaining a web page accessible to anyone over the Internet. 14. Toeppen argues he has not directed any activity toward Panavision in
b. In reaching this conclusion in Cybersell, we carefully reviewed California, much less “entered” the state. He contends that all he did was
cases from other circuits regarding how personal jurisdiction should register Panavision's trademarks on the Internet and post web sites using
be exercised in cyberspace. We concluded that no court had ever those marks; if this activity injured Panavision, the injury occurred in
held that an Internet advertisement alone is sufficient to subject a cyberspace.
party to jurisdiction in another state. In each case where personal a. We agree that simply registering someone else's trademark as a
jurisdiction was exercised, there had been “something more” to domain name and posting a web site on the Internet is not sufficient
“indicate that the defendant purposefully (albeit electronically) to subject a party domiciled in one state to jurisdiction in another.
directed his activity in a substantial way to the forum state.” As we said in Cybersell, there must be “something more” to
Cybersell FL had not done this, and the district court could not demonstrate that the defendant directed his activity toward the
exercise personal jurisdiction over it. forum state. Here, that has been shown. Toeppen engaged in a
c. Personal jurisdiction was properly exercised, however, in scheme to register Panavision's trademarks as his domain
CompuServe, Inc. v. Patterson. There, the Sixth Circuit held that a names for the purpose of extorting money from Panavision. His
Texas resident who had advertised his product via a computer conduct, as he knew it likely would, had the effect of injuring
information service, CompuServe, located in Ohio, was subject to Panavision in California where Panavision has its principal
personal jurisdiction in Ohio. The court found that the Texas place of business and where the movie and television industry is
resident had taken direct actions that created a connection with Ohio. centered. Under the “effects test,” the purposeful availment
11. In the present case, the district court's decision to exercise personal requirement necessary for specific, personal jurisdiction is
jurisdiction over Toeppen rested on its determination that the purposeful satisfied.
availment requirement was satisfied by the “effects doctrine. There, we said:
“Likewise unpersuasive is Cybersell AZ's reliance on Panavision Defendant’s Forum-Related Activities
International v. Toeppen, [the district court's published opinion in this case],
where the court found the ‘purposeful availment’ prong satisfied by the
15. We must determine if Panavision would not have been injured “but for” the
effects felt in California, the home state of Panavision, from Toeppen's
Toeppen's conduct directed toward Panavision in California.
alleged out-of-state scheme to register domain names using the trademarks
a. This requirement is satisfied. Toeppen's registration of
of California companies, including Panavision, for the purpose of extorting
Panavision's trademarks as his own domain names on the
fees from them. Again, there is nothing analogous about Cybersell FL's
Internet had the effect of injuring Panavision in California. But
conduct.” for Toeppen's conduct, this injury would not have occurred.
Panavision's claims arise out of Toeppen's California-related
The Effects Doctrine activities.

12. In tort cases, jurisdiction may attach if the defendant's conduct is aimed Reasonableness
at or has an effect in the forum state. Under Calder, personal jurisdiction
can be based upon: “(1) intentional actions (2) expressly aimed at the
16. Even if the first two requirements are met, in order to satisfy the Due Process
forum state (3) causing harm, the brunt of which is suffered-and which
Clause, the exercise of personal jurisdiction must be reasonable. For
the defendant knows is likely to be suffered-in the forum state.”
jurisdiction to be reasonable, it must comport with “fair play and substantial
13. As the district court correctly stated, the present case is akin to a tort
justice.” [W]here a defendant who purposefully has directed his activities
case. Toeppen purposefully registered Panavision's trademarks as his domain
at forum residents seeks to defeat jurisdiction, he must present a
names on the Internet to force Panavision to pay him money. The brunt of the
compelling case that the presence of some other considerations would
harm to Panavision was felt in California. Toeppen knew Panavision would
render jurisdiction unreasonable.
likely suffer harm there because, although at all relevant times Panavision
17. As we have said, Toeppen purposefully directed his activities at Panavision for Panavision to litigate in another forum, but the burden on
in California. This placed the burden on him to “present a compelling case Panavision is relatively slight. This factor is essentially neutral,
that the presence of some other considerations would render jurisdiction perhaps weighing slightly in Toeppen's favor.
unreasonable.” g. the existence of an alternative forum - Panavision has not
18. In addressing the question of reasonableness, we consider seven factors demonstrated the unavailability of an alternative forum. In this case,
(Burger King factors): Illinois is an alternative forum. As stated above, it may be more
a. the extent of a defendant's purposeful interjection – here, the degree costly and inconvenient for Panavision to litigate in Illinois, but this
of interjection was substantial. Toeppen's acts were aimed at is not an unreasonable burden. This factor weighs in Toeppen's
Panavision in California. He registered Panavision's trademarks as favor.
his domain names, knowing that this would likely injure Panavision 19. No one factor is dispositive; a court must balance all seven.
in California. In addition, he sent a letter to Panavision in California 20. In balancing the Burger King factors, we conclude that although some
demanding $13,000 to release his registration of Panavision.com. factors weigh in Toeppen's favor, he failed to present a compelling case
The purposeful interjection factor weighs strongly in favor of the that the district court's exercise of jurisdiction in California would be
district court's exercise of personal jurisdiction. unreasonable.
b. the burden on the defendant in defending in the forum - The burden
on Toeppen as an individual living in Illinois to litigate in California 21. We conclude that all of the requirements for the exercise of specific, personal
is significant, but the inconvenience is not so great as to deprive him jurisdiction are satisfied. The district court properly exercised personal
of due process. As the district court stated, “‘in this era of fax jurisdiction over Toeppen. The district court found that Toeppen had not
machines and discount air travel’ requiring Toeppen to litigate in presented a compelling case that jurisdiction was unreasonable. We agree.
California is not constitutionally unreasonable.” The balance of the Burger King factors which we articulated in Core-Vent
c. the extent of conflict with the sovereignty of the defendant's state - tips in favor of the exercise of personal jurisdiction.
This factor concerns the extent to which the district court's exercise
of jurisdiction in California would conflict with the sovereignty of Trademark Dilution Claims
Illinois, Toeppen's state of domicile. Such a conflict is not a concern
in this case. The allegations in support of Panavision's state law 22. The Federal Trademark Dilution Act provides: The owner of a famous mark
claim and those in support of its federal claim under the Trademark
shall be entitled to an injunction against another person's commercial use in
Dilution Act require the same analysis. The federal analysis would
commerce of a mark or trade name, if such use begins after the mark has
be the same in either Illinois or California. In this circumstance, the
become famous and causes dilution of the distinctive quality of the mark
exercise of jurisdiction by a federal court in California does not
23. The California Anti-dilution statute is similar. It prohibits dilution of “the
implicate sovereignty concerns of Illinois.
distinctive quality” of a mark regardless of competition or the likelihood of
d. the forum state's interest in adjudicating the dispute - “California
confusion. The protection extends only to strong and well recognized marks.
maintains a strong interest in providing an effective means of redress
Panavision's state law dilution claim is subject to the same analysis as its
for its residents tortiously injured.” Panavision's principal place of
federal claim.
business is in California. This factor weighs in Panavision's favor.
24. In order to prove a violation of the Federal Trademark Dilution Act, a
e. the most efficient judicial resolution of the controversy - This factor
plaintiff must show that (1) the mark is famous; (2) the defendant is
focuses on the location of the evidence and witnesses. It is no longer making a commercial use of the mark in commerce; (3) the defendant's
weighed heavily given the modern advances in communication and use began after the mark became famous; and (4) the defendant's use of
transportation. Id. In any event, due to the limited amount of
the mark dilutes the quality of the mark by diminishing the capacity of
evidence and few potential witnesses in the present litigation, this
the mark to identify and distinguish goods and services.
factor is probably neutral.
25. Toeppen challenges the district court's determination that he made
f. the importance of the forum to the plaintiff's interest in convenient
“commercial use” of the mark and that this use caused “dilution” in the
and effective relief - In evaluating the convenience and effectiveness
quality of the mark.
of relief for the plaintiff, we have given little weight to the plaintiff's
a. Toeppen argues that his use of Panavision's trademarks simply as
inconvenience. It may be somewhat more costly and inconvenient
his domain names cannot constitute a commercial use under the Act.
 Case law supports this argument. In developing this argument, c. Toeppen made a commercial use of Panavision's trademarks. It does
Toeppen contends that a domain name is simply an address used to not matter that he did not attach the marks to a product. Toeppen's
locate a web page. He asserts that entering a domain name on a commercial use was his attempt to sell the trademarks themselves.
computer allows a user to access a web page, but a domain name is Under the Federal Trademark Dilution Act and the California Anti-
not associated with information on a web page. If a user were to type dilution statute, this was sufficient commercial use.
Panavision.com as a domain name, the computer screen would 30. “Dilution” is defined as “the lessening of the capacity of a famous mark
display Toeppen's web page with aerial views of Pana, Illinois. The to identify and distinguish goods or services, regardless of the presence
screen would not provide any information about “Panavision,” other or absence of (1) competition between the owner of the famous mark and
than a “location window” which displays the domain name. other parties, or (2) likelihood of confusion, mistake or deception.”
Toeppen argues that a user who types in Panavision.com, but who a. To find dilution, a court need not rely on the traditional definitions
sees no reference to the plaintiff Panavision on Toeppen's web page, such as “blurring” and “tarnishment.” The court found that
is not likely to conclude the web page is related in any way to the Toeppen's conduct diminished “the capacity of the Panavision
plaintiff, Panavision. marks to identify and distinguish Panavision's goods and services on
26. Toeppen's argument misstates his use of the Panavision mark. His use is the Internet.”
not as benign as he suggests. Toeppen's “business” is to register 31. Toeppen argues he is not diluting the capacity of the Panavision marks to
trademarks as domain names and then sell them to the rightful identify goods or services. He contends that even though Panavision cannot
trademark owners. He “act[s] as a ‘spoiler,’ preventing Panavision and use Panavision.com and Panaflex.com as its domain name addresses, it can
others from doing business on the Internet under their trademarked still promote its goods and services on the Internet simply by using some
names unless they pay his fee.” This is a commercial use. other “address” and then creating its own web page using its trademarks.
27. As the district court found, Toeppen traded on the value of Panavision's a. We reject Toeppen's premise that a domain name is nothing more
marks. So long as he held the Internet registrations, he curtailed Panavision's than an address. A significant purpose of a domain name is to
exploitation of the value of its trademarks on the Internet, a value which identify the entity that owns the web site. “A customer who is unsure
Toeppen then used when he attempted to sell the Panavision.com domain about a company's domain name will often guess that the domain
name to Panavision. name is also the company's name.”
28. In a nearly identical case involving Toeppen and Intermatic Inc., a federal b. Using a company's name or trademark as a domain name is also the
district court in Illinois held that Toeppen's conduct violated the Federal easiest way to locate that company's web site. Use of a “search
Trademark Dilution Act. engine” can turn up hundreds of web sites, and there is nothing
29. Toeppen's reliance on Holiday Inns, Inc. v. 800 Reservation, Inc. is misplaced. equivalent to a phone book or directory assistance for the Internet.
In Holiday Inns, the Sixth Circuit held that a company's use of the most c. Moreover, potential customers of Panavision will be discouraged if
commonly misdialed number for Holiday Inns' 1-800 reservation number was they cannot find its web page by typing in “Panavision.com,” but
not trademark infringement. instead are forced to wade through hundreds of web sites. This
a. Holiday Inns is distinguishable. There, the defendant did not use dilutes the value of Panavision's trademark.
Holiday Inns' trademark. Rather, the defendant selected the most d. Toeppen's use of Panavision.com also puts Panavision's name and
commonly misdialed telephone number for Holiday Inns and reputation at his mercy.
attempted to capitalize on consumer confusion. 32. We conclude that Toeppen's registration of Panavision's trademarks as his
b. A telephone number, moreover, is distinguishable from a domain domain names on the Internet diluted those marks within the meaning of the
name because a domain name is associated with a word or phrase. Federal Trademark Dilution Act, 15 U.S.C. § 1125(c), and the California
A domain name is similar to a “vanity number” that identifies its Anti-dilution statute, Cal.Bus. & Prof.Code § 14330.
source. Using Holiday Inns as an example, when a customer dials
the vanity number “1-800-Holiday,” she expects to contact Holiday
Inns because the number is associated with that company's
trademark. A user would have the same expectation typing the
domain name HolidayInns.com. The user would expect to retrieve
Holiday Inns' web page.
 022 Yahoo! Inc v. La Ligue (Valle) France, the US court cannot enforce a foreign order that violates the rights
7 Nov 2001 | Fogel, J. | Cyber-Era protected under the US Constitution itself, by chilling protected speech that
occurs within its borders.
PETITIONER: Yahoo Incorporated
RESPONDENTS: La Ligue Contre Le Racisme et Lantisemitisme (LICRA) Also, the order of the French Court for Yahoo to take down all Nazi related posts
on its auction site is too general to pass the Strict Scrutiny under the First
SUMMARY: Amendment. The phrase “and any other site or service that may be construed as
This case involves Yahoo’s regional site in France and its auction site in an apology for Nazism or a contesting of Nazi crimes fails to provide Yahoo with
yahoo.com. a sufficiently definite warning as to what is proscribed. Phrases such as “all
LICRA is a nonprofit organization dedicated to eliminating anti-semitism and necessary emasures” and “render impossible” instruct Yahoo to undertake efforts
Yahoo is a corporation organized under Delaware laws with principal place of that will impermissibly chill and perhaps censor protected speech.
business in Santa Clara, California. The auction site of Yahoo allows anyone to
post products for sale and solicit bids from any user around the Globe. Yahoo DOCTRINE:
records the posting and sends emails to the highest bidder and the seller with tehir The reason for limiting comity in this area is sound. "The protection to free speech
contact information. While the company prohibits certain items from being dold and the press embodied in the First amendment would be seriously jeopardized by
and provides for policies to regulate the sale, Yahoo does not actively regulate the the entry of foreign judgments granted pursuant to standards deemed appropriate
content and individuals can post and have posted highly offensive matter including in [another country] but considered antithetical to the protections afforded the
Nazi related propaganda and Third Reich Memorabilia. press by the U.S. Constitution.”
Because of these, LICRA sent a cease and desist against Yahoo. It informed
Yahoo that these Nazi related propaganda and Third Reich goods violate French Absent a law that establishes international standards with respect to speech on the
Laws. A civil complaint was filed against yahoo in the French Courts. Internet and an appropriate treaty or legislation addressing enforcement of such
The French Courts issued two orders (In detail in Facts 11 and 13) which said that standards to speech originating within the United States, the principle of comity
the auction site violated French laws and ordered the company to eliminate access is outweighed by the Court's obligation to uphold the First Amendment.
of French Citizens to the prohibited material in the auction site, access to
webpages on Yahoo.com that displays prohibited texts, post warnings on the sites,
FACTS:
remove from all browser directiories.
Note: There are differences between Yahoo, Yahoo.com, and Yahoo.fr in this case.
Yahoo asked the court to reconsider. It said that compliance was impossible
When the digest indicates Yahoo, it’s the Yahoo company in Santa Clara. Yahoo.com
because it was not technologically capable. Despite this, the French Court
is the website in US. And Yahoo.fr is the French region website.
reaffirmed its order.
67. La Ligue Contre Le Racisme et Lantisemitisme and L’Union Des Etudiants
Yahoo argues that to ban all Nazi-related material from the site altogether would
Juifs De France, citizens of France, (LICRA altogether) is a non-profit French
infringe upon its right under the First Amendment of the US constitution. Yahoo
Organization dedicated to eliminating anti-semistism.
filed a complaint before the US court for declaratory judgement that the orders of
68. Yahoo is a corporation organized in Delaware with principal place of
the French Court are neither cognizable or enforceable under the laws of the US.
business in Santa Clara, California. This company is an internet service
provider that operates various websites and services that any computer user
The issue here is whether or not the principle of comity allows for another nation
can access.
to regulate speech by a US resident within the US on the basis that such speech
69. Yahoo US
can be accessed by users in that nation. NO, because the French Court’s order on
a. It does not have an associated country code as a prefix or extension
the regulation of the web pages and auction site on Yahoo.com would be
(a country code is like.ph or .us). Its target users are residents of,
inconsistent with the First Amendment in the US Constitution if it were mandated
utilize servers based in and operate under US Laws.
by a court in the US.
70. But Yahoo has subsidiaries that operate Yahoo France, Yahoo India, etc. each
of these regional web sites contains the host nation’s unique two-letter code
such as .fr, .kr etc. The regional site suse the local region’s primary language
While France has a sovereign right to regulate what speech is permissible in
and target the local citizenry and operate under local laws.
71. Yahoo! Has a search engine, email , automatced auction site, personal web f. The court set a return date in July 2000 for Yahoo to report its
page hostings, shopping services, chat rooms, and listings of clubs. compliance.
72. Yahoo’s auction site allows anyone to post an item for sale and solicit bids 78. Yahoo asked the French court to reconsider the terms of the order. It claimed
from any computer user from around the globe. Yahoo records the posting that although it easily could post the warning in Yahoo.fr, compliance with
and after the requisite time period lapses, sends an email notif to the highest requirements with respect to Yahoo.com was technologically impossible.
bidder and seller with their respective contact info. Yahoo is not a party to 79. The French Court sought expert opinion and reaffirmed the order (SECOND
the transaction (the buyer and seller arrange the payment and shipment). ORDER). It ordered Yahoo to comply with this order within 3months or face
Yahoo monitors the transaction through limited regulation by prohibiting a penalty of 100K Francs for each day of noncompliance. The order also
particular items from being sold and by providing a rating system. included that Yahoo cannot collect from yahoo France the payments for the
73. Yahoo informs sellers that they must comply with its policies and may not penalties.
offer items buyers in jurisdictions in which the sale of such item violates the 80. Yahoo posted the required warning and prohibited postings from appearing
jurisdiction’s applicable laws. Yahoo doesn’t actively regulate the content of in Yahoo.fr. Yahoo also amended the auction policy in Yahoo.com to prohibit
each posting and individuals are able to post and have in fact posted highly indiviauls from auctioning:
offensive matter (including nazi and Third Reich memorabilia). a. Any item that promotes, glorifies, or is directly associated with
74. LICRA sent a cease and desist letter to Yahoo’s Santa Clara HQ informing it groups or individuals known principally for hateful or violent
that the sale of of Nazi and Third Reich goods through its services violated positions or acts, such as Nazis or the Ku Klux Klan. Official
French Law. LICRA threatened to take legal action unless Yahoo took steps government-issue stamps and coins are not prohibited under this
to prevent the sale within 8days. Licra utilized the US Marshal’s office to policy. Expressive media, such as books and films, may be subject
serve Yahoo with process in California and filed a civil complaint in the to more permissive standards as determined by Yahoo! in its sole
Tribuna de Grande Instance de Paris (the French Court). discretion.
75. The French Court found that approximately 1000 Nazi and Third Reich 81. But despite this, Yahoo.com auction site still offers certain items for sale
objects including Hitler’s Mein Kampf, The Protocol of the Elders of Zion which violate the French order. Whole Yahoo has removed the Protocol from
and purported evidence that the gas chambers of the Holocaust did not exist the Elders of zion from its site, it hasn’t prevented access to other sides which
were being auctioned. may be construed as constituting an apology for Nazism or a contesting of
76. Because any French citizen is able to access these directly through the Nazi crimes.
Yahoo.fr, the French Court concluded that the Yahoo.com auction site 82. Yahoo claims that it lacked technology to block French Citizens from
violated Sec. R645-1 of the French Criminal Code which prohibits exhibition accessing the Yahoo.com auction site to view materials which violate the
of Nazi Propaganda and artifacts for sale. French Order or from accessing other Nazi-based content of websites on
77. THE FIRST ORDER: The French Court ordered Yahoo to: Yahoo.com. It contends that such a ban would infringe impermissibly upon
a. Eliminate French Citizens’ access to any material on the auction site its rights under the First Amendment to the US Constitution. Yahoo filed a
that offers for sale any Nazi related object complaint in this court seeking a declaratory judgment that the French
b. Eliminate French citizens’ access to web pages on Yahoo.com Court’s Orders are neither cognizable nor enforceable under the laws of the
displaying texts, extracts, or quotations from Mein kampf and US.
Protocol of the Elders of Zion 83. LIRCA moved to dismiss on the basis that this court lacks personal
c. Post a warning to French citizens on yahoo.fr that any search jurisdiction over them. This motion was denied. LIRCA requested that the
through yahoo.com may lead to such sites prohibited under the Court certify its jurisdictional determination for interlocutory appeal. This
French Criminal Code and that viewing of the prohibited material was also denied without prejudice pending the outcome of Yahoo’s motion
may result in legal action against the user for summary judgement.
d. Remove from all browser directories accessible in the French
Republic index headings entitled “negationists” and from all ISSUE/s:
hypertext links the equation of “negationists” under the heading 21. WoN is consistent with the Constitution and laws of the US for another
“Holocaust.” nation to regulate speech by a US resident within the US on the basis that
e. The order subjects Yahoo to a penalty of 100K euros for each day such speec can be accessed by Internet users in that nation– NO!, because the
that it fails to comply. French Court’s order on the regulation of the web pages and auction site on
 Yahoo.com would be inconsistent with the First Amendment in the US This requirement is analysed in the same manner s the case or controversy
Constitution if it were mandated by a court in the US. standard under Art III of the US Constitution.
170. The threshold question is “whether there is a substantial controversy between
RULING: Yahoo! seeks a declaration from this Court that the First Amendment parties having adverse legal interests of sufficient immediacy and reality to
precludes enforcement within the United States of a French order intended to warrant the issuance of a declaratory judgment.”
regulate the content of its speech over the Internet. Yahoo! has shown that the French a. Mere possibility, even probability, that a person may in the future
be adversely affected by official acts not yet threatened does NOT
order is valid under the laws of France, that it may be enforced with retroactive
create an actual controversy.
penalties, and that the ongoing possibility of its enforcement in the United States b. Party invoking the federal jurisdiction has the burden or proof to
chills Yahoo!'s First Amendment rights. Yahoo! also has shown that an actual there is an immediate or actual injury.
controversy exists and that the threat to its constitutional rights is real and Status of French Order
immediate. Defendants have failed to show the existence of a genuine issue of LIRCA’s contentions
material fact or to identify any such issue the existence of which could be shown 171. LIRCA contends that the actual controversy requirement is NOT met. Yahoo
through further discovery. Accordingly, the motion for summary judgment will be appealed the French Court’s First order and that a successful appeal would
nullify the Second Order which reaffirmed the first order. LIRCA argues that
granted. The Clerk shall enter judgment and close the file.
even if the first order is upheld on appeal, the French court may find that
yahoo has substantially complied with the order. Alternatively, they assert
IT IS SO ORDERED.
that they themselves my elect not to initiate the complex process the French
court would use to fix an actual penalty and that until such process is
RATIO:
completed, there is no order that could be enforced against Yahoo in the US>
164. There is little doubt that Internet users in US routinely engage in speech that
172. Finally, LIRCA offers declarations to the effect that they view Yahoo’s
violates laws of various nations against advocacy of gender equality or
revised policies from its host sites as substantial compliance with the French
homosexuality or even the UK’s restrictions on freedom of the press.
orders and that they have no present intention of taking legal action against
165. If the government or another party in one of these sovereign nations were to
Yahoo in the US.
seek enforcement of such laws against yahoo or another US based internet
173. The court said that the facts in the record do not support LIRCA’s
service provider, what principles should guide the court’s analysis?
contentions. First, there are no relevant appellate proceedings presently
166. The court stated that it must and will decide this case in accordance with
pending in France. In the Second Order the French Court determined that
the Constitution and laws of the US. It recognizes that in so doingm it
yahoo is technologically and legally capable of complying with the first
necessarily adopts certain value judgments embedded in those enactments,
order. The second order was not appelaed and the record indicates that Yahoo
including fundamental judgment expressed in the First Amendment that it
withdrew its appeal of the First Order.
is preferable to permit the non-violent expression of offensive viewpoints
174. The fact that any penalty against Yahoo is provisional and would require
rather than to impose viewpoint-based governmental regulation upon
further legal proceedings prior to any enforcement in the US, does not mean
speech.
that Yahoo does not face a present and ongoing threat from the existing
167. The government and people of France have made a different judgment based
French order.
upon their own experience. In undertaking its inquiry as to the proper
175. LIRCA idd not dispute that if the penalty enforcement process were initiated,
application of the laws of the US, this court intends no disrespect.
the French court could assess penalties retroactively for the entire period of
Declaratory Judgment (you can skip this part)
Yahoo’s non compliance.
168. The Declaratory Judgment Act protects potential defendants from multiple
176. LIRCA has not taken steps available to them under French law to seek
actions by providing a means by which a court declares in one action the
withdrawal of the order or to petition the French Court to absolve Yahoo from
rights and obligations of the litigants. A declaratory judgment will not expand
the penalty.
a federal court’s jurisdiction, but if jurisdiction exists, litigants have earlier
177. It is by no means clear that yahoo can rely upon the assessment in LIRCA’s
access to federal courts to spare potential defendants from threat of
declarations that it is in “substantial compliance” with the order. The French
impending litigation.
Court has not made such a finding nor has LIRCA requested or stipulated that
169. Declaratory judgments are justiciable only if there is an actualy controversy.
such a finding be made.
 178. Yahoo.com continues to offer at least some Third Reich memorabilia as well were enforceable by defendants only prospectively. Here, the order permits
as Mein Kampf on its auction site and permits access to numerous web pages retroactive penalties. While the exemptions granted to Salvation army
with Nazi related content. The fact that Yahoo does not know whether its allowed it to maintain status quo, the French order had the immediate effect
efforts to date have met the French Court’s mandate is the precise harm of inducing Yahoo to implement new restrictive policies on its auction site.
against which the Declaratory Judgment is designed to protect. 11. Here, LIRCA’s assurance that they do not intend to enforce the order at the
The threat and the First Amendment (IMPORTANT) present time do not remove the threat that they may yet seek sanctions against
1. The French Order prohibits the sale or display of items based on their Yahoo’s present and ongoing conduct.
association with a particular political organization and bans the display of Abstention
websites based on the author’s viewpoint with respect to the Holocaust and 1. LIRCA argues that this court should abstain from decising the case because
anti-semitism. A US court constitutionally could NOT make such an order. Yahoo is simply unhappy with the outcome of the French Litigation and is
2. The first amendment does not permit the goverment to engage in trying to obtain a more favorable judgment.
viewpoint-based regulation of speech absent a compelling government 2. Indeed, abstention is an appropriate remedy for international forum-
interest, such as averting a clear and present danger of imminent shopping. In this case, the French Court has determined that Yahoo’s auction
violence. site violate French law. Nothing in Yahoo’s suit for declaratory relief appears
3. The French Court’s mandate that Yahoo take all necessary measures to to be an attempt to relitigate or disturb the French Court’s application of rench
dissuade and render impossble any access via Yahoo.com to the Nazi artifact laws or its orders. Rather, the purpose is to determine whether US court may
auction service and to any other site or service that may be construed as enforce the French Order without running against the First Amendment.
constituting an apology for Nazism or a contesting of Nazi Crimes is far too
general and imprecise to survive the strict scrutiny required by the First Comity (IMPORTANT ALSO)
Amendment. 1. No legal judgment has any effect of its own force beyond the limits of the
4. The phrase “and any other site or service that may be construed as an apology sovereignity from which its authority is derived. The extent to which the US
for Nazism or a contesting of Nazi crimes fails to provide Yahoo with a or any state, honors the judicial decrees of foreign nations is a matter of
sufficiently definite warning as to what is proscribed. choice governed by comity of nations.
5. Phrases such as “all necessary emasures” and “render impossible” instruct 2. Comity is neither a matter of absolute obligation nor of mere courtesy and
Yahoo to undertake efforts that will impermissibly chill and perhaps censor good will upon the other. The court is not required to give effects to foreign
protected speech. judicial proceedings grounded on policies which do violence to its own
6. LIRCA argues that there is no real or immediate trheat to the First fundamental interests.
Amenemdnt Rights of Yahoo because the French Order cannot be enforced 3. As stated earlier, the French Court’s order would be inconsistent with the
at all until after the cumbersome process of petitioning the French Court to First Amendment if mandated by a court in the US. What makes this case
fix a penalty has been completed. unique is that the internet allows one person to speak in more than one place
7. But there is no dispute that the French Order is valid under French law and at the same time.
that the French Court may fix a penalty retroactive to the date of the order. 4. Although France has the sovereign right to regulate what speech is
8. LIRCA also argues that there is no real or immediate threat because they do permissible in France, the US court cannot enforce a foreign order that
not presently intend to seek enforcement of the French Order in the US. violates the rights protected under the US Constitution itself, by chilling
9. IN salvation army v. Department of community affairs of the state of New protected speech that occurs within its borders.
Jersey 5. The reason for limiting comity in this area is sound. "The protection to
a. A religious group that operated a family center for disadvantaged free speech and the press embodied in the First amendment would be
persons claimed a state statute regulating boarding houses violated seriously jeopardized by the entry of foreign judgments granted
its right to free exercise of religion. pursuant to standards deemed appropriate in [another country] but
b. Here the CA held that there was no immediate threat to the group considered antithetical to the protections afforded the press by the U.S.
because the state had provided an express assurance that it woud not Constitution.”
enforce any of the waived provisions, no criminal penalties 6. And Absent a law that establishes international standards with respect
imposed. to speech on the Internet and an appropriate treaty or legislation
10. That case and this case are distinguishable. The New Jersey statute’s penalties addressing enforcement of such standards to speech originating within
 the United States, the principle of comity is outweighed by the Court's
obligation to uphold the First Amendment.

Rule 56)f) of the civil procedure of Federal Courts

1. This rule permits a court either to postpone determination of a motion for
summary judgment or to deny such motion pending discovery. A court may
take such action when "it appear[s] from the affidavits of a party opposing
the motion that the party cannot for reasons stated present by affidavit facts
essential to justify the party's opposition.
2. LIRCA asserts that further discovery may lead to the development of triable
issues of fact concerning the extent to which yahoo can modify its auction
site which can affect the liability under the French Order and as to yahop’s
ability to comply with the order. LIRCA contends that these issues are
material because the law is unsettled as to whether the First Amendment
protects speech originating within the US that is expressly targeted at a
foreign market.
3. The question of whether Yahoo possess the technology to comply with the
order is immaterial. Compliance would still involve an impermissible
restriction on speech.
 000 AMERICA ONLINE v. SUPERIOR COURT (VICENCIO) remedies for disabled and senior citizens.
June 21, 2001 | Ruvolo, J. | Special Topics – Cyber Era
However, the Court disagrees on Mendoza's point that the clause should not be
PETITIONER: America Online, Inc. enforced simply because it would compel customers to travel to Virginia to
RESPONDENTS: The Superior Court of Alameda County; Al Mendoza, Jr. et litigate. The additional cost or inconvenience necessitated by litigation in the
al. selected forum is not part of the calculus when considering whether a forum
selection clause should be enforced. Mere inconvenience or additional expense is
SUMMARY: A class action was filed by Mendoza for himself and other not the test of unreasonableness since it may be assumed that the plaintiff received
complainants against Americal Online, Inc. (AOL) seekins compensatory and under the contract consideration for these things.
punitive damages, injunctive relief, and restitution. Mendoza alleges that the real
parties in interest are former subscribers. They are former subscribers to AOL's DOCTRINE: An agreement designating a foreign law will not be given effect if
Internet service who, over the past four years, paid between $5 and $22 each it would violate a strong public policy or result in an evasion of a statute of the
month for the service. Monthly payments were made by allowing AOL to debit forum protecting its citizens.
automatically the credit cards of class members. The class members terminated
their subscriptions to AOL but, without authorization, AOL continued to debit FACTS:
their credit cards for monthly service fees. The complaint alleged separate causes 84. A class action was filed by Mendoza for himself and others against America
of action on violations of California’s Unfair Business Practices Act, California’s Online, Inc. (AOL) seeking compensatory and punitive damages,
Consumer Legal Remedies Act, common law conversion/trespass and common injunctive relief, and restitution.
law fraud. AOL filed a motion to dismiss on the ground of inconvenient forum 85. The complaint alleges that real parties are former subscribers to AOL's
based on the forum selection clause contained in the Terms of Agreement entered Internet service who, over the past four years, paid between $5 and $22 each
into between Mendoza (and other subscribers) with AOL upon their subscription. month for the service. Monthly payments were made by allowing AOL to
The Terms vest exclusive jurisdiction in the courts of Virginia. It also cainted a debit automatically the credit cards of class members.
choice of law provision designating Virginia law as being applicable to any 86. The class members terminated their subscriptions to AOL but, without
dispute between parties. The lower court ruled that the forum selection clause was authorization, AOL continued to debit their credit cards for monthly service
unfair and unreasonable and would diminish consumer rights afforded by fees.
California laws. Issue: WoN the forum selection clause is enforceable – NO. It is 87. Mendoza individually alleged that he gave AOL notice of the cancellation of
against Californian public policy. his subscription in October 1999, but AOL continued to charge monthly fees
against his credit card at least through February 2000, at which time Mendoza
If the litigation will be transferred to Virginia where Virginia Law will be applied, cancelled his credit card in order to stop the debits.
the plaintiffs would lose benefit of California laws which favour them. The 88. The complaint alleged separate causes of action including
enforcement of AOL’s forum selection clause, which is also accompanied by a a. violations of California's Unfair Business Practices Act (First Cause
choice of law provision favouring Virgnia, would necessitate a waiver of the of Action) (Bus. & Prof.Code, §§ 17200 et seq.),
statutory remedies of the California Consumers Legal Remedies Act (CLRA). b. violations of California's Consumers Legal Remedies Act (CLRA)
This waiver is invalid as first, the CLRA carries an antiwaiver provision, and (Second Cause of Action) (Civ. Code, § 1770, subd. (a)(14)),
second, it is against California public policy. The CLRA was enacted in an attempt c. common law conversion/trespass (Third Cause of Action), and
to alleviate social and economic problems stemming from deceptive business d. common law fraud (Fourth Cause of Action).
practices. 89. The complaint also prayed that the action proceed as a class action under
Code of Civil Procedure section 382, Civil Code section 1781, and Business
This conclusion is reinforced by a statutory comparison of California and Virginia and Professions Code section 17204, and that Mendoza and the class be
consumer protection laws, which reveals Virginia's law provides significantly less awarded compensatory and punitive damages, restitution, prejudgment
consumer protection to its citizens than California law provides for our own. In interest, attorney fees and costs, and a permanent injunction halting AOL's
Virginia law, there is unavailability of class actions, apparent limitations in practice, and requiring it to disseminate corrective notices.
injunctive relief, and non-recoverability of punitive damages or enhanced 90. Shortly thereafter, AOL filed a motion to stay or dismiss the action on the
 ground of inconvenient forum. those in California.
91. As noted, the motion was based on the forum selection clause contained in 98. AOL filed a petition for writ of mandamus. On November 28, 2000, we
the "Terms of Service" (TOS) agreement entered into between Mendoza and issued an order to show cause why a peremptory writ of mandamus should
AOL at the time he subscribed to AOL's proprietary Internet service. not issue. Thereafter, on January 4, 2001, we discharged the order to show
92. The TOS, attached as Exhibit A in support of AOL's motion, is a 4½-page, cause as improvidently granted, and denied the petition.
single-spaced, unsigned document. Paragraph 8 of the TOS entitled "LAW 99. AOL then petitioned the Supreme Court for review. On February 28, 2001,
AND LEGAL NOTICES" states in part the following: "You expressly agree the high court granted the petition for review, and transferred the matter back
that exclusive jurisdiction for any claim or dispute with AOL or relating to this court with directions to issue an order to show cause why the relief
in any way to your membership or your use of AOL resides in the courts requested in the petition should not be granted. On March 2, 2001, we issued
of Virginia and you further agree and expressly consent to the exercise of a new order to show cause as directed by the Supreme Court.
personal jurisdiction in the courts of Virginia in connection with any such
dispute including any claim involving AOL or its affiliates, subsidiaries, ISSUE/s:
employees, contractors, officers, directors, telecommunications providers 22. WoN the forum selection clause is enforceable – It violates strong California
and content providers...." public policy. It would necessitate a waiver of California laws which are
93. Additionally, paragraph 8 contained a choice of law provision designating favorable to the plaintiffs.
Virginia law as being applicable to any dispute between the parties: "The
laws of the Commonwealth of Virginia, excluding its conflicts-of-law RULING: The order to show cause is discharged and the petition for writ of mandate
rules, govern this Agreement and your membership." is denied. Costs are awarded to Mendoza.
94. In support of its motion, AOL contended the forum selection clause was
presumptively valid under California law, was a rational, voluntary, and RATIO:
conscionable choice, and that its enforcement would not violate any strong Overview of Forum Selection Clause Enforcement
public policy of this state. Among the legal authorities on which it relied, 179. AOL correctly posits that California favors contractual forum selection clauses so
AOL referred to several unpublished out-of-state cases in which the clause long as they are entered into freely and voluntarily, and their enforcement would not
be unreasonable.
had been previously enforced. 180. This favorable treatment is attributed to our law's devotion to the concept of one's free
95. In response, Mendoza objected to Exhibit A, claiming that the document did right to contract, and flows from the important practical effect such contractual rights
not accurately reflect what was displayed to him when he commenced service have on commerce generally. This division has characterized forum selection clauses
with AOL. Instead, he described seeing displayed on his home computer as "play[ing] an important role in both national and international commerce."
monitor a "densely worded, small-size text that was hard to read on the 181. We agree with these sentiments, and view such clauses as likely to become even more
computer screen." ubiquitous as this state and nation become acculturated to electronic commerce.
96. This objection formed the leitmotif for Mendoza's claim that the TOS was an Moreover, there are strong economic arguments in support of these agreements,
unconscionable adhesion contract, and that under applicable rules of contract favoring both merchants and consumers, including reduction in the costs of goods and
construction, the forum selection clause was unenforceable. In addition, services and the stimulation of e-commerce.
182. But this encomium is not boundless. Our law favors forum selection agreements only
Mendoza contended the TOS was unreasonable and unenforceable because it
so long as they are procured freely and voluntarily, with the place chosen having some
necessarily required him and the putative class members to relinquish legal logical nexus to one of the parties or the dispute, and so long as California consumers
rights in derogation of California public policy. will not find their substantial legal rights significantly impaired by their enforcement.
97. On September 25, 2000, the court entered its order denying AOL's motion. Therefore, to be enforceable, the selected jurisdiction must be "suitable,"
After discussing several of the pertinent cases bearing on the issue, the court "available," and able to "accomplish substantial justice."
denied the motion finding that:
a. the forum selection clause was unfair and unreasonable because it was not Enforcement of the Forum Selection Clause Violates Strong California Public Policy
negotiated, it was contained in a standard form contract, and was in a format 1. California courts will refuse to defer to the selected forum if to do so would
that was not readily identifiable by Mendoza; substantially diminish the rights of California residents in a way that violates our
b. AOL had failed to carry its burden of proving that the consumer rights state's public policy. For example, in CQL Original Products, Inc. v. National Hockey
afforded under California law would not be diminished by enforcement of League Players' Assn., the appellate court ruled that "a forum selection clause will not
the clause; and be enforced if to do so will bring about a result contrary to the public policy of the
c. the remedies available to consumers in Virginia were not comparable to forum....". After reviewing the agreement in question, the court concluded there was
 no public policy reason to deny enforcement of the provision. 9. Certainly, the CLRA provides remedial protections at least as important as those
2. In Hall v. Superior Court (1983), two California investors exchanged their interests under the Corporate Securities Law of 1968. Therefore, by parity of reasoning,
in an oil and gas limited partnership in return for stock in one of their co-investors, enforcement of AOL’s forum selection clause, which is also accompanied by a
Imperial Petroleum, Inc., a Utah corporation. Closer to the facts of this case, the choice of law provision favoring Virginia, would necessitate a waiver of the
contract embodying their exchange agreement contained both forum selection and statutory remedies of the CLRA, in violation of that law’s antiwaiver provision
choice of law provisions identifying Nevada as the selected forum and governing law. (Civ.Code, § 1751) and California public policy. For this reason alone, we affirm
A dispute arose, and the two investors sued Imperial in California. Imperial asserted the trial court's ruling.
the forum selection clause, and the trial court found the forum selection clause was 10. This conclusion is reinforced by a statutory comparison of California and
enforceable. In reversing the lower court's decision, the appellate court undertook an Virginia consumer protection laws, which reveals Virginia's law provides
examination of both the choice of law clause as well as the forum selection clause significantly less consumer protection to its citizens than California law provides
noting that the enforceability of these clauses were "inextricably bound up" in one for our own. Consumers who prove violations of the CLRA within the three-year
another. limitations period may be entitled to a minimum recovery of $1000, restitution or
3. The court held: "While California does not have any public policy against a choice of property, power of injunctive relief, and punitive damages. (Civ.Code, §§ 1780, subd.
law provision, where it is otherwise appropriate and choice of law provisions are (a)(1)-(4); 1783.) Attorney fees and costs are also recoverable if the plaintiffs prevail
usually respected by California courts ... an agreement designating a foreign law on their claim under the act. In addition to these extraordinary remedies, if the
will not be given effect if it would violate a strong California public policy ... or complaining consumer is a senior citizen or disabled person, up to $5000 may be
result in an evasion of ... a statute of the forum protecting its citizens." awarded for substantial physical, emotional distress, or economic damage. Of course,
4. The Hall court determined that if the pending securities litigation were transferred to the CLRA specifies that actions under that act may be prosecuted as class actions.
Nevada where Nevada law would be applied, the plaintiffs would lose the benefit 11. Virginia also has a statutory scheme denominated the Virginia Consumer Protection
of California's Corporate Securities Law of 1968 which would otherwise govern Act of 1977 (VCPA). The purpose of the VCPA is to "promote fair and ethical
the transaction in question. This California law was designed to protect the standards of dealings between suppliers and the consuming public." The panoply of
public from fraud and deception in securities matters, by providing statutory prohibited acts appears to be as comprehensive as those under the CRLA, and covers
remedies for violations of the California Corporations Code. For this reason, the the specific misconduct by AOL alleged in Mendoza's complaint. Under the VCPA,
remedial scheme, like the California Consumers Legal Remedies Act (CRLA) individuals are entitled to sue and recover actual damages, or a minimum of $500,
involved in this case, contains an antiwaiver provision. whichever is greater. If willful misconduct is proved, the minimum damages increase
5. The court concluded: "We believe the right of a buyer of securities in California to to $1000. Attorney fees and costs "may" be awarded. Restitution is also available.
have California law and its concomitant nuances apply to any future dispute arising 12. However, if the violation is determined to be "unintentional," the only remedies
out of the transaction is a ‘provision’ within the meaning of Corporations Code section obtainable are restitution and attorney fees and court costs. The Virginia act has
25701 which cannot be waived or evaded by stipulation of the parties to a securities a two-year limitations period.
transaction. Consequently, we hold the choice of Nevada law provision in this 13. The parties disagree whether, and to what extent, private injunctive relief is available
agreement violates section 25701 and the public policy of this state [citation] and under the VCPA. The applicable statute (Va.Code Ann, § 59.1-203) is somewhat
for that reason deny enforcement of the forum selection clause as unreasonable." ambiguous. However, at bottom we agree with AOL that a more reasonable
6. It is important to consider that the Hall court denied enforcement of the forum reading of the statute appears to support injunctive relief for individuals,
selection clause solely on the inevitability that doing so would eliminate the although we do not agree that the law allows private persons to obtain injunctive
protections of California's Corporate Securities Law; a result prohibited by the anti- relief on behalf of others similarly situated.
waiver feature of that law. However, it did not compare the California statutory 14. In this respect injunctive relief afforded by the CRLA is unique, as its purpose is
scheme to that afforded by Nevada law to determine if the remedies provided by each not simply to correct future private injury but to remedy a public wrong. As
were materially different. explained by our Supreme Court in Broughton: “Whatever the individual motive of
7. The California Consumers Legal Remedies Act (CLRA) parallels the Corporate the party requesting injunctive relief, the benefits of granting injunctive relief by and
Securities Law of 1968, at issue in Hall, insofar as the CRLA is a legislative large do not accrue to that party, but to the general public in danger of being victimized
embodiment of a desire to protect California consumers and furthers a strong public by the same deceptive practices as the plaintiff suffered. In other words, the plaintiff
policy of this state. "The CLRA was enacted in an attempt to alleviate social and in a CLRA damages action is playing the role of a bona fide private attorney general.”
economic problems stemming from deceptive business practices, which were 15. Of greater importance is the absence of any provision in the VCPA that allows
identified in the 1969 Report of the National Advisory Commission on Civil Disorders suits under the Act to proceed as class actions. Unless specifically allowed by
(i.e., the Kerner Commission). statute, class action relief is not generally available in Virginia in actions at law.
8. Section 1760 contains an express statement of legislative intent: “This title shall be 16. In contrast to Virginia consumer law's ostensible hostility to class actions, the
liberally construed and applied to promote its underlying purposes, which are to right to seek class action relief in consumer cases has been extolled by California
protect consumers against unfair and deceptive business practices and to provide courts. A notable example is the opinion in Vasquez v. Superior Court, in which the
efficient and economical procedures to secure such protection.” Supreme Court considered the question of whether consumers could pursue a class
 action for restitution for fraud in connection with a now-infamous installment 22. Yet Mendoza contends that Smith Valentino's admonition not to consider convenience
purchase contract scheme to sell freezers and frozen meat to California and cost in evaluating the validity of forum selection clauses applies only where there
consumers. Justice Mosk, writing for a unanimous Supreme Court, first noted that remains a "practical option of travel to the selected forum in terms of the expense and
"[protection of unwary consumers from being duped by unscrupulous sellers is an value of the controversy." As we understand it, Mendoza is arguing that expense in
exigency of the utmost priority in contemporary society." litigating in the selected forum can be considered if it exceeds the amount in
17. Using memorable prose, Justice Mosk then explained the importance of class actions controversy or at least renders the choice to litigate "impractical."
as an instrumentality of consumer protection: "Frequently numerous consumers are 23. We disagree that Smith Valentino can be read so narrowly. No case of which we are
exposed to the same dubious practice by the same seller so that proof of the prevalence aware has interpreted this language as Mendoza suggests we should. Moreover, it is
of the practice as to one consumer would provide proof for all. Individual actions by not at all clear what monetary amount was in dispute in that case, or whether it was
each of the defrauded consumers is often impracticable because the amount of "practical" to bring the litigation in the selected forum.
individual recovery would be insufficient to justify bringing a separate action; 24. Although the current dispute between Mendoza and AOL might make it impractical
thus an unscrupulous seller retains the benefits of its wrongful conduct. A class for Mendoza to pursue an individual claim in Virginia, there may be other potential
action by consumers produces several salutary by-products, including a therapeutic disputes between Mendoza and AOL arising from their relationship which would have
effect upon those sellers who indulge in fraudulent practices, aid to legitimate business significantly greater value.
enterprises by curtailing illegitimate competition, and avoidance to the judicial 25. As can be seen, in addition to reading a limitation in our Supreme Court's opinion
process of the burden of multiple litigation involving identical claims. The benefit to which is not warranted, the practical problems in accepting Mendoza's restricted
the parties and the courts would, in many circumstances, be substantial." reading of Smith Valentino are formidable, and will ensnare trial courts in endless
18. That this view has endured over the last 30 years is of little surprise given the proceedings during which these factors would be argued and weighed. It was perhaps
importance class action consumer litigation has come to play in this state. In light of just such a concern that, in part, moved the Supreme Court to pronounce costs and
that history, we cannot accept AOL's assertion that the elimination of class actions convenience "are not the test of reasonableness of forum selection clauses."
for consumer remedies if the forum selection clause is enforced is a matter of 26. As part of that analysis, courts must determine if the substantive law of the selected
insubstantial moment. The unavailability of class action relief in this context is forum is in conflict with a "fundamental public policy of California." If so, the
sufficient in and by itself to preclude enforcement of the TOS forum selection choice of law provision is not to be enforced if California has an interest in having
clause. its own law applied to the dispute. If relevant at all, the legal principles underlying
19. In addition to the unavailability of class actions and the apparent limitation in both Nedlloyd and Washington Mutual are entirely consistent with our opinion.
injunctive relief, neither punitive damages, nor enhanced remedies for disabled 27. Lastly, we are also unpersuaded by AOL's contention that the trial court erred in
and senior citizens are recoverable under Virginia's law. More nuanced not granting AOL's request for a stay of the California action to allow the
differences are the reduced recovery under the VCPA for "unintentional" acts, a Virginia court to determine whether the relief available to Mendoza is consistent
shorter period of limitations, and Virginia's use of a Lodestar formula alone to with California consumer law.
calculate attorney fees recovery. Quite apart from the remedial limitations under 28. AOL claims that if the Virginia court found inconsistency, the California court could
Virginia law relating to injunctive and class action relief, the cumulative importance then re-assert jurisdiction, deny enforcement of the forum selection clause, and allow
of even these less significant differences is substantial. Enforcement of a forum Mendoza to proceed in the California forum. We reject this claim because:
selection clause, which would impair these aggregate rights, would itself violate a. it is unnecessary for us to defer our decision until a Virginia course clarifies
important California public policy. For this additional reason the trial court was its consumer law, for we do not find Virginia consumer law to be nearly
correct in denying AOL's motion to stay or to dismiss. as opaque as suggested by counsel for AOL;
20. In so holding we reject Mendoza's contention that the clause should not be b. AOL suggests no procedural device which would allow a California
enforced simply because it would be patently unreasonable to require him or court to proceed with the underlying case after a Virginia court has
other AOL customers who form the putative class to travel to Virginia to litigate ruled; and
the relatively nominal individual sums at issue. He points out that in 1998 and 1999, c. a stay would take an already financially impractical legal dispute and
not a single suit by a non-Virginia resident appears to have been filed in AOL's compound the expense to resolve it by necessitating
Virginia home county, a development Mendoza suggests is directly related to the fact perhaps two lawsuits.
that the cost of prosecuting a claim in Virginia vastly exceeds the amounts normally
at issue in individual claims against AOL.
21. But the additional cost or inconvenience necessitated by litigation in the selected
forum is not part of the calculus when considering whether a forum selection
clause should be enforced. Our Supreme Court has put this matter to rest in Smith
Valentino when it quoted: "Mere inconvenience or additional expense is not the
test of unreasonableness since it may be assumed that the plaintiff received under
the contract consideration for these things."